BEIJING (Reuters) – Oil prices on Wednesday, scaled back from gains that had gained momentum the previous day, pushed by an unexpected climb in US rough stocks.
FILE PHOTO: An oil and gas drilling installation owned by Transocean Ltd is standing at the Grand Harbor in Valletta, Malta, October 22, 2015. REUTERS / Balazs Koranyi / File Photo
Brent crude futures LCOc1 had dropped by 22 cents or $ 78.81 a barrel by 0042 GMT and gained by 1.26 percent on Tuesday.
US West Texas Intermediate (WTI) crude CLc1 fell 0.20 percent, or 14 cents, to $ 69.71 per barrel.
US raw stocks increased by 1.2 million barrels to 397.1 million in the week to 14 September, according to data released on Tuesday by the American Petroleum Institute (API). That compared with the expectations of analysts for a decrease of 2.7 million barrels.
Stocks of distillate fuels, including diesel and fuel oil, increased by 1.5 million barrels, showing the API data, compared to expectations for a profit of 651,000 barrels.
"The US rough construction temporarily caught the attention of the trader," said Chen Kai, head of commodity research at broker Shengda Futures.
"Increasing fuel stocks in the US and strong rough runs can lead to a higher premium for Brent versus WTI."
Meanwhile, ministers from OPEC countries and non-OPEC producers will meet each other on Sunday to discuss compliance with the output policy. The OPEC sources told Reuters that no immediate action was planned and that producers would discuss how they could share a previously agreed increase in output.
OPEC with a group of non-OPEC producers, including Russia, started with the holding of oil stocks in 2017 to end global abundance and propup prices.
Bloomberg reported on Tuesday, citing nameless Saudi sources, that the kingdom was comfortable at the moment with prices of more than $ 80 per barrel, at least for the short term.
Bloomberg reported that although Saudi Arabia had no desire to push prices higher than $ 80, it might no longer be possible to prevent this. US sanctions affecting the Iranian petroleum sector should take effect from November 4.
Elsewhere, the latest escalation in the bite-sized trade war between the United States and China caused concern about global economic growth and oil demand.
Beijing quickly added $ 60 billion of US products to its import tariff list on Tuesday as a retaliation for President Donald Trump's planned charges on $ 200 billion of Chinese goods.
Reporting by Meng Meng and Aizhu Chen; Edited by Joseph Radford