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Wednesday, July 6, 2022

Crude oil lower on US stock build, reduced supply concerns; Brent at $71.73/b, WTI $67.57

London — Crude futures ticked lower during European morning trading Wednesday, weighed on by a surprise increase in US inventories reported by the American Petroleum Institute that left little respite for oil market bulls amid reduced concerns over global supply tightness.

At 1100 GMT, ICE September Brent crude futures were down 43 cents/b at $71.73/b, while the NYMEX August light sweet crude contract was down 51 cents/b at $67.57/b.

The API said US crude stockpiles increased 629,000 barrels in the week to last Friday, against expectations of a drawdown of 3 million barrels in a survey of analysts by S&P Global Platts.

The inventory data followed on the heels of reports of rising output from Saudi Arabia, Russia and the US, with Russia output hitting 11.22 million b/d in early July, according to a recent Interfax report.

Reduced concerns over potential supply outages in Libya have also kept prices in the red, as the country’s oil production was expected to rise above 800,000 b/d on the back of increased output from eastern oil fields.

On Tuesday, Libya’s state-owned National Oil Corporation declared force majeure on crude exports from the Zawiya port following a recent kidnapping at Sharara, the country’s biggest oil field.

“The API data has set the weekly tone in the market and there is not much there for the bulls in terms of supply,” said Harry Tchilinguirian, senior oil analysts at BNP Paribas. “This [comes] on the heels of the report by Interfax that Russia is ramping up and dialing back their cuts and the news that the US may be considering an SPR (Strategic Petroleum Reserve) release.”

Oil market participants were awaiting more definitive stocks data due to be released by the US Energy Information Administration later Wednesday.

The US dollar index was up 0.32 from Tuesday’s close at 95.31.

–Philip Reeder, [email protected]

–Edited by Dan Lalor, [email protected]

Source: S&P Global Platts

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