Oil Prices Fall Amid US Inventory Build, Middle East Disruptions
Oil prices fell on Wednesday after an unexpectedly large build in US crude inventories. Brent crude futures dropped by $0.73, or 0.67%, to $108.02 a barrel at 0450 GMT, while US West Texas Intermediate futures decreased by $1.1, or 1.04%, to $104.73 a barrel.
The price drop comes after two days of gains, with both benchmarks reaching their highest levels since May 19 on Tuesday due to supply concerns and Saudi Arabia's cut in oil shipments to Europe.
US crude oil, gasoline, and distillate inventories all rose last week, market sources said on Tuesday. Crude inventories increased by 7.1 million barrels in the week ended September 11, surpassing analysts' expectations for a draw of about 1.6 million barrels.
Despite the inventory pressure, prices remained resilient as traders focused on disruptions to physical supplies, according to Priyanka Sachdeva, head of market insights at Phillip Nova. The bigger concern remains the disruption to Saudi Arabia's East-West pipeline and Yanbu export infrastructure following attacks on Saudi energy facilities.