Oil prices moved lower on Wednesday after data showed an unexpected increase in U.S. crude inventories. The build outweighed continued concerns over supply disruptions in the Middle East.
Crude markets also faced some profit-taking after strong gains in recent weeks. Rising tensions between Saudi Arabia and Houthi forces, along with disruptions around the Strait of Hormuz, had previously pushed prices sharply higher.
Brent crude futures fell around 0.75% to $107.94 a barrel, while West Texas Intermediate crude dropped 1.1% to $104.70.
However, losses remained limited as ongoing Middle East supply risks kept oil prices close to their yearly highs.
U.S. Oil Inventories Rise Unexpectedly
Data from the American Petroleum Institute showed that U.S. crude inventories increased by 7.14 million barrels in the week ending September 11.
Markets had instead expected inventories to decline by around 1.8 million barrels.
The API figures are often viewed as an early indication of official U.S. inventory data, which is scheduled for release later on Wednesday.
The unexpected build suggested that stockpiles in the world’s largest fuel-consuming economy remained relatively well supplied despite disruptions affecting global oil markets.
Strategic Petroleum Reserve Releases Remain in Focus
Part of the inventory increase may also reflect continued releases from the U.S. Strategic Petroleum Reserve.
Energy Information Administration data showed that the reserve had declined substantially during 2026, falling to around 285.36 million barrels.
Continued withdrawals from the reserve can help increase available domestic supply and reduce some of the pressure created by disruptions elsewhere in the global market.
Middle East Supply Risks Limit Oil Losses
Despite the U.S. inventory build, concerns over Middle East oil supplies prevented a steeper decline in crude prices.
Saudi Arabia reportedly halted loading operations at its Yanbu port after shutting down the East-West pipeline following attacks linked to Yemen’s Houthi movement.
Further attacks during the week increased concerns about the security of Saudi energy infrastructure and major regional shipping routes.
The situation has also raised fears of additional disruption around the Red Sea and Bab el-Mandeb Strait, both of which are important routes for global energy trade.
Strait of Hormuz Remains a Major Risk
Oil markets are also closely watching developments around the Strait of Hormuz.
Continued tensions between the United States and Iran have reduced oil flows through the strategically important waterway compared with levels seen before the conflict.
The Strait of Hormuz remains one of the world’s most important energy transit routes, meaning further disruptions could have a significant impact on global crude supplies and prices.
Brent Crude Remains Near Annual Highs
Despite Wednesday’s decline, Brent crude remained sharply higher for the week.
Prices had gained nearly 4% during the week after rising roughly 8% in each of the previous two weeks.
The recent rally reflects growing expectations that Middle East supply disruptions could persist and keep global oil markets tight.
Fed Decision Adds to Market Caution
Traders were also cautious ahead of the Federal Reserve’s latest interest rate decision.
Markets widely expected the central bank to raise interest rates, adding another source of uncertainty for commodities and financial markets.
Higher interest rates can strengthen the U.S. dollar and weigh on commodity demand, while persistent energy inflation could also influence the Federal Reserve’s policy outlook.
For now, oil prices remain caught between rising U.S. inventories and continued concerns over Middle East supply disruptions.
