Investing.com - Crude oil futures remained lower on Wednesday, after a U.S. government report showed a larger-than-expected increase in U.S. oil supplies last week, while growing fears over the euro zone’s debt crisis pushed European-benchmark Brent to the lowest level since mid-February.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD104.30 a barrel during U.S. morning trade, dipping 0.33%.
It earlier fell by as much as 0.65% to trade at a session low of USD103.94 a barrel.
Crude prices traded at USD104.18 a barrel prior to the release of the Energy Information Administration data.
Meanwhile, on the ICE Futures Exchange, Brent oil futures for June delivery dropped 0.93% to trade at 117.67 a barrel. It earlier fell by as much as 1.15% to trade at USD117.38 a barrel, the lowest since February 14.
The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 3.9 million barrels in the week ended April 13, above expectations for a 1.4 million barrel increase. U.S. crude supplies rose by 2.8 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 369.0 million barrels as of last week, the highest since June, underscoring fears over a slowdown in oil demand from the U.S.
Total motor gasoline inventories decreased by 3.7 million barrels, compared to expectations for a 0.9 million barrel decline, after falling by 4.3 million barrels in the preceding week.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Meanwhile, London-traded Brent came under pressure amid growing concerns over the euro zone’s sovereign debt crisis, which could weigh on future energy demand from the region.
Market sentiment waned ahead of a critical auction of two and 10-year Spanish government bonds on Thursday, amid concerns the country will be the next euro zone member to seek an international bailout.
In addition, concerns over Spain’s troubled banking sector mounted after the country’s central bank reported that the amount of bad loans at domestic banks rose to an 18-year high in February.
Meanwhile, worries over Portugal’s economic health intensified after Prime Minister Pedro Passos Coelho said Wednesday there were "no guarantees" that the country would meet its commitment to return to the international capital markets before September 2013.
The decoupling between the New York traded crude contracts and the London-based Brent saw the spread between the two contracts narrow to USD13.37 a barrel, the smallest differential since late-January.
The spread between the world’s two main oil benchmarks has hit highs above USD20 in recent months. The gap between the two contracts widened to a record USD27.88 a barrel in October of last year.
The reduced spread between the two main global oil benchmarks came following news on Monday that owners of the Seaway pipeline slated to carry crude from Cushing, Oklahoma to the Gulf of Mexico had asked federal authorities to fast-forward the project by about two weeks.
Pipeline operators Enbridge and Enterprise Products Partners said they plan to switch the flow on Seaway about May 17, according to a filing with the Federal Energy Regulatory Commission.
If approved, the pipeline will start operating two weeks ahead of the original June 1 start date, helping to ease a supply gut in the U.S. Midwest by pumping it to refineries on the Gulf Coast.
Meanwhile, in a speech Tuesday U.S. President Barack Obama announced a USD52 billion plan to regulate the oil markets in an effort to lower gasoline prices.
Obama announced his regulatory plan despite studies indicating that speculation increases volatility but does not have a major effect on average price.
Energy policy has emerged as a major election-year issue between Obama and Republicans.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD104.30 a barrel during U.S. morning trade, dipping 0.33%.
It earlier fell by as much as 0.65% to trade at a session low of USD103.94 a barrel.
Crude prices traded at USD104.18 a barrel prior to the release of the Energy Information Administration data.
Meanwhile, on the ICE Futures Exchange, Brent oil futures for June delivery dropped 0.93% to trade at 117.67 a barrel. It earlier fell by as much as 1.15% to trade at USD117.38 a barrel, the lowest since February 14.
The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 3.9 million barrels in the week ended April 13, above expectations for a 1.4 million barrel increase. U.S. crude supplies rose by 2.8 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 369.0 million barrels as of last week, the highest since June, underscoring fears over a slowdown in oil demand from the U.S.
Total motor gasoline inventories decreased by 3.7 million barrels, compared to expectations for a 0.9 million barrel decline, after falling by 4.3 million barrels in the preceding week.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Meanwhile, London-traded Brent came under pressure amid growing concerns over the euro zone’s sovereign debt crisis, which could weigh on future energy demand from the region.
Market sentiment waned ahead of a critical auction of two and 10-year Spanish government bonds on Thursday, amid concerns the country will be the next euro zone member to seek an international bailout.
In addition, concerns over Spain’s troubled banking sector mounted after the country’s central bank reported that the amount of bad loans at domestic banks rose to an 18-year high in February.
Meanwhile, worries over Portugal’s economic health intensified after Prime Minister Pedro Passos Coelho said Wednesday there were "no guarantees" that the country would meet its commitment to return to the international capital markets before September 2013.
The decoupling between the New York traded crude contracts and the London-based Brent saw the spread between the two contracts narrow to USD13.37 a barrel, the smallest differential since late-January.
The spread between the world’s two main oil benchmarks has hit highs above USD20 in recent months. The gap between the two contracts widened to a record USD27.88 a barrel in October of last year.
The reduced spread between the two main global oil benchmarks came following news on Monday that owners of the Seaway pipeline slated to carry crude from Cushing, Oklahoma to the Gulf of Mexico had asked federal authorities to fast-forward the project by about two weeks.
Pipeline operators Enbridge and Enterprise Products Partners said they plan to switch the flow on Seaway about May 17, according to a filing with the Federal Energy Regulatory Commission.
If approved, the pipeline will start operating two weeks ahead of the original June 1 start date, helping to ease a supply gut in the U.S. Midwest by pumping it to refineries on the Gulf Coast.
Meanwhile, in a speech Tuesday U.S. President Barack Obama announced a USD52 billion plan to regulate the oil markets in an effort to lower gasoline prices.
Obama announced his regulatory plan despite studies indicating that speculation increases volatility but does not have a major effect on average price.
Energy policy has emerged as a major election-year issue between Obama and Republicans.