Crude oil prices Wednesday ended the trading session near six-month highs after data showed U.S. inventories rose to the highest amount in 18 months, allaying concerns of tight supply resulting from Opec+ output cuts and U.S. sanctions on Venezuela and Iran.
U.S. West Texas Intermediate crude oil futures settled 41 cents lower, at $65.89 per barrel, down more than 0.5%, Kallanish Energy reports. The contract hit $66.60/Bbl Tuesday, the highest price since Oct. 31.
Brent a new 6-month closing high
Brent crude futures rose 6 cents, to $74.57/Bbl, a new six-month closing high. The international benchmark reached $74.73/Bbl Tuesday, its highest intraday level since Nov. 1.
U.S. crude inventories rose 5.5 million barrels (Mmbbl) at April 19, the Energy Information Administration reported Wednesday, more than four times analysts’ forecast of an increase of 1.3 million barrels.
U.S. crude stocks jumped last week as imports increased. The nation imported an average 7.1 million barrels per day (Mmbpd) last week, up more than 1.1 Mmbpd from the previous week.
Prices jump on end of waivers
Crude futures and prices for spot delivery jumped after the U.S. said Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran as of May 2, or face punitive action. The move raised worries about tighter global oil supplies.
Crude inventories highest in 18 months
|Week ended||Stored crude|
|April 19||460.63 million barrels|
|April 12||455.15 Mmbbl|
|April 5||456.55 Mmbbl|
|March 29||449.52 Mmbbl|
|March 22||442.28 Mmbbl|
Source: Energy Information Administration
The U.S. must be prepared for “consequences” if it tries to stop Iran from selling oil and using the Strait of Hormuz, Iran’s foreign minister, Mohammad Javad Zarif, said Wednesday.
Saudi Arabia, Uae will balance markets
The U.S. Monday singled out Saudi Arabia and the United Arab Emirates as partners to balance oil markets. Saudi energy minister Khalid al-Falih said Wednesday his country’s production in May would not vary greatly from previous months.
“Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately,” Falih said, Reuters reported.
He added Saudi Arabia looks to maintain its output quota fixed in a deal by Opec+, a group of producer-nations that includes most Opec members, along with a number of non-Opec producers led by Russia. June numbers would be determined depending on customers’ needs.
Crude output in the U.S., which became the world’s top producer in 2018, last week returned to its record high at 12.2 Mmbpd of production, EIA data showed.
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