Oil prices reversed gains on Wednesday, as official government figures showed U.S. crude stockpiles rose last week, contradicting an earlier report showing a drop.
U.S. commercial crude inventories rose by 1.9 million barrels to 420.3 million in the week through Feb. 2, the U.S. Energy Information Administration reported.
That was lower than the roughly 3-million-barrel increase analysts anticipated in a pair of surveys. But data on Tuesday from the American Petroleum Institute had shown a decline of 1.1 million barrels, setting market expectations for a drop after the previous week’s big rise, according to Reuters reports.
U.S. West Texas Intermediate (WTI) crude futures fell 95 cents, or 1.5 percent, to $63.66 a barrel by 10:45 a.m. ET (15:45 GMT). The contract hit a nearly one-month low and was trading down 4.6 percent this week.
Brent crude futures were down 46 cents to $66.40 a barrel. The contract is 3.2 percent for the week.
Gasoline stocks rose by 3.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 459,000-barrel gain. Distillate stockpiles, which include diesel and heating oil, were up by 3.9 million barrels, versus expectations for a 1.4 million-barrel drop, the EIA data showed.
“Evidence points to a global inventory market that has arguably already balanced — with days of forward cover in the low single digits or possibly even lower — which should support the spot price going forward,” said Richard Robinson, manager of the Ashburton Global Energy fund.
The Organization of the Petroleum Exporting Countries and other producers, including Russia, have cut production since last January to force down global inventories.
But rising U.S. oil production has been looming over the market. Output has risen by 1 million barrels per day in the last year to about 10 million bpd.
The EIA figures on Wednesday also showed weekly U.S. production hit 10.25 million barrels a day. The rise above the 10-million-barrel mark was telegraphed by last week’s report that November output rose above that level for the first time since 1970.
The U.S. Energy Information Administration (EIA) expects U.S. output to reach an average of 10.59 million bpd in 2018 and 11.18 million bpd by 2019, potentially overtaking Russia as the world’s largest producer.
Subscribe To Newsletter
