Investing.com - Crude oil prices settled lower on Wednesday following data showing an unexpected jump in U.S. crude supplies.
On the New York Mercantile Exchange crude futures for June delivery fell 36 cents to settle at $71.84 a barrel, while on London's Intercontinental Exchange, Brent fell 0.23% to trade at $79.75 a barrel.
Inventories of U.S. crude rose by 5.778 million barrels for the week ended May 18, confounding expectations for a draw of 1.567 million barrels, according to data from the Energy Information Administration (EIA).
The unexpected rise in crude supplies came as exports fell - despite the widening spread between WTI crude and Brent oil prices – while imports rose.
Crude imports rose 558,000 barrels per day (bpd) last week to 8.159 million bpd, while exports fell 818,000 bpd to 1.748 million bpd. An uptick in refinery activity limited the size of the build in crude inventories yet product supplies missed expectations.
Gasoline inventories – one of the products that crude is refined into – rose by 1.883 million barrels, missing expectations for a fall of 1.388 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by 0.951 million barrels, missing expectations for a draw of 1.335 million barrels.
U.S. oil output remained elevated, at just more than 10.7 million barrels a day, according to preliminary EIA data.
“Overall, the data was negative for oil prices over the longer-term as the aggregate build of 4.2 million barrels implies that the market is in a supply surplus,” National Alliance said.
The bearish inventory report saw WTI oil prices fall for a second straight day for the first time since April but there is further room for upside before higher prices offset demand, according to Canaccord.
“Our hunch is that the $85-to-90 a barrel range could be the peak in this cycle,” Canaccord said.