Oil Prices Fall on US Inventories
Unexpected U.S. Stock Build Offsets Saudi Supply Risks
Oil prices fell on Wednesday after an unexpected increase in U.S. crude inventories outweighed concerns over potential supply disruptions in Saudi Arabia. Brent crude futures fell 93 cents, or 0.86%, to $107.82 a barrel, while U.S. West Texas Intermediate declined 97 cents, or 0.92%, to $104.86 a barrel.
The decline came after both benchmarks had settled more than $3 higher on Tuesday, reaching their highest levels since May 19. Investors were balancing the latest U.S. inventory data against continuing concerns about Saudi oil exports.
According to data from the American Petroleum Institute, U.S. crude inventories increased by 7.1 million barrels in the week ending September 11. Analysts had instead expected inventories to fall by around 1.6 million barrels. Gasoline and distillate inventories also increased, adding further pressure on oil prices.
At the same time, Saudi Arabia has suspended oil loadings at its Yanbu port after shutting its East-West pipeline following an attack by Yemen's Iran-aligned Houthis. The pipeline can reroute around 4 million barrels of oil per day, equivalent to roughly 4% of global supply, to the Red Sea.
The expected duration of the pipeline disruption remains uncertain. The U.S. energy secretary said oil flows should resume within days, while sources cited by Reuters gave repair estimates ranging from several days to five or six weeks.
Separately, Libya's National Oil Corporation said operations at three oil fields were suspended after protesters shut a valve on the Hamada-Zawiya crude export pipeline. However, Libya's overall production has remained around 1.4 million barrels per day, limiting the immediate impact on global supply.
The latest market movement highlights the competing forces shaping oil prices: higher U.S. inventories are weighing on prices, while disruptions in Saudi Arabia continue to keep global supply concerns elevated.