Oil Prices Slip on US Inventory Build, Middle East Disruptions Persist
Oil prices declined on Wednesday, reversing their two-day rally after data revealed an unexpectedly large increase in US crude inventories. Brent crude futures fell $0.73 or 0.67% to $108.02 a barrel at 0450 GMT, while US West Texas Intermediate futures dropped $1.1 or 1.04% to $104.73 a barrel.
The decline was tempered by ongoing supply disruptions in the Middle East, with Saudi Arabia's East-West pipeline still shut down following an attack on its energy facilities. Oil loadings at Saudi Arabia's Yanbu port have also been suspended, and European diesel futures reached a record high due to tightness in fuel markets.
Despite the inventory pressure, traders remain focused on disruptions to physical supplies, with Priyanka Sachdeva, head of market insights at Phillip Nova, noting that 'the bigger concern remains the disruption to Saudi Arabia's East-West pipeline and Yanbu export infrastructure.'