Oil prices slipped on Wednesday after an industry report showed a rise in U.S. crude inventories, reinforcing market concerns about oversupply. However, the decline remained limited as sanctions on Russian oil continued to support prices.
Brent crude futures fell 22 cents (0.3%) to $64.67 a barrel by 0730 GMT, after gaining 1.1% in the previous session.
U.S. West Texas Intermediate futures dropped 17 cents (0.3%) to $60.57 a barrel, following a 1.4% rise on Tuesday.
According to market sources citing data from the American Petroleum Institute, U.S. crude and fuel inventories increased last week. Crude stocks rose by 4.45 million barrels in the week ending November 14. Gasoline inventories climbed by 1.55 million barrels, while distillate inventories were up 577,000 barrels.
ING commodities strategists described the report as “relatively bearish,” although they noted that traders remain more focused on supply risks than the chances of a growing surplus.
U.S. sanctions on Russian oil companies Rosneft and Lukoil set a November 21 deadline for businesses to end their dealings with the firms. The U.S. Treasury said on Monday that the sanctions are already cutting into Russia’s oil revenue and will likely reduce export volumes. Buyers in China and India have begun shifting to other suppliers.
Analysts noted that oil prices remain rangebound as the market tracks the impact of the upcoming sanctions. At the same time, oversupply sentiment continues to create downward pressure.
Prices rose on Tuesday as investors assessed the sanctions’ effect and ongoing Ukrainian strikes on Russian refineries and export terminals, which increased fears of supply disruptions.
These supply concerns are being balanced against forecasts that global oil output exceeds current demand, a factor that has weighed on prices.
After recent attacks on Russian energy and port infrastructure, diesel profit margins in Europe surged to their highest level since September 2023, supported by rising refinery margins worldwide.
Analysts at Haitong Futures said the strong diesel market is helping support crude prices, but persistent oversupply is making investors cautious.
Official U.S. government inventory data is due later on Wednesday. Eight analysts surveyed by Reuters expect crude inventories to have fallen by an average of 600,000 barrels in the week ending November 14.
