Oil prices fall after day of gains amid surprise growth in American crude stocks

Oil prices on Wednesday pulled back from gains racked up the previous day, pushed down amid a surprise climb in US crude stockpiles.

Brent crude futures had dropped 22 cents, or 0.28 percent, to $78.92 per barrel by 17:00, chipping away at Tuesday’s 1.26 percent gain.

US West Texas Intermediate (WTI) crude CLc1 fell 0.20 percent to $69.71 a barrel.

US crude inventories rose by 1.2 million barrels to 397.1 million in the week leading up to September 14, according to data released on Tuesday by the American Petroleum Institute (API). That compared with analyst expectations for a decrease of 2.7 million barrels.

Stockpiles of distillate fuels, which include diesel and heating oil, rose by 1.5 million barrels, the API data showed, compared with expectations for a 651,000-barrel gain.

“The US crude build temporarily grabbed trader attention,” said Chen Kai, head of commodities research at broker Shengda Futures.

“Increasing fuel stocks in the US and strong crude runs could lead to a bigger premium for Brent versus WTI.”

Meanwhile, ministers from OPEC nations and non-OPEC producers are set to meet on Sunday to discuss compliance with output policies. OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase.

The Organization of the Petroleum Exporting Countries (OPEC) along with a group of non-OPEC producers including Russia started withholding oil supplies in 2017 to end a global glut and prop up prices.

Bloomberg reported that Saudi Arabia is currently comfortable with prices above $80 per barrel.