Investing.com — Oil prices fell on Wednesday, ending a recent recovery as industry data showed an unexpected rise in U.S. inventories.
But prices rose sharply last week as continued supply disruptions from Hurricane Francine and the prospect of lower rates sent traders into crude at sharply reduced levels.
An escalation of tensions in the Middle East also helped fuel demand for crude oil as Hezbollah vowed retaliation against Israel after the country was accused this week of detonating pagers across Lebanon.
fell 0.2% to $73.53 per barrel, while down 0.2% to $69.84 per barrel at 10:18 ET (14:18 GMT). Both contracts were up sharply last week from near three-year lows.
US Stocks Surge Unexpectedly – API
US oil inventories data showed an unexpected rise in US oil inventories in the week to September 13.
Inventories rose 1.96 million barrels per day, compared with expectations for a decline of 0.1 million barrels per day and a decline of 2.79 million barrels per day from the previous week.
The figures come after official data last week showed a rise in US inventories, indicating demand from the world’s biggest fuel consumer was cooling with the end of the summer travel season.
The API data usually announces a similar reading of , due later on Wednesday. The surprising development also signals limited disruptions to production due to Hurricane Francine, which tore through the Gulf of Mexico last week.
Concerns about demand, interest rate cuts in sight
Chinese markets reopened on Wednesday after a long holiday, with local traders reacting to a barrage of weak economic data from the country.
The figures had raised concerns about slowing growth in the world’s biggest oil importer, which could hit crude appetite.
Markets were also tense ahead of a two-day close later in the day, when the central bank is widely expected to cut interest rates for the first time in more than four years.
Markets are divided on expectations for a 25 or 50 basis point cut.
Anticipation of Wednesday’s decision pulled the dollar lower, helping crude oil rise somewhat.
(Ambar Warrick contributed reporting)
