Oil prices diverge on swelling US inventories
Oil prices diverged Wednesday as traders digested news of soaring US crude inventories that stoked concern over the global supply glut.
At about 1600 GMT, US benchmark West Texas Intermediate for delivery in June nudged 17 cents higher to $43.82 per barrel.
Brent crude for July delivery drifted 13 cents lower to stand at $44.84 a barrel.
American commercial crude stockpiles rose 2.8 million barrels to 543.4 million barrels in the week ending April 29, the US government's Department of Energy (DoE) said in its weekly inventories report.
That overshot market expectations for a gain of 750,000 barrels, according to analysts polled by Dow Jones Newswires.
The increase was double that of industry body the American Petroleum Institute (API), which had logged an increase of 1.3 million barrels.
"Crude oil has held its ground in the last twenty-four hours despite DoE and API data both showing a bigger than expected rise in weekly oil inventories," said CMC Markets analyst Jasper Lawler.
Rising US inventories tend to push prices lower because they indicate weaker demand in the world's biggest crude consuming nation.
The DoE added that gasoline or petrol reserves rose 500,000 barrels last week, confounding expectations for a drop of 250,000.
Distillates, which include diesel and heating fuel, fell 1.3 million barrels. Analysts had pencilled in an increase of 400,000.
The oil market had risen in earlier deals on Wednesday, but a pick-up in the dollar and rising Iranian crude output limited gains.
Crude had closed lower for the third straight session Tuesday on renewed supply glut concerns as the United States and China released disappointing manufacturing data indicating ongoing weaknesses in the two economic giants.
Prices have surged over the past month hitting 2016 highs on signs of economic improvement in China, a weaker dollar and hopes that stalled talks on limiting output could be revived by oil producing nations.
However, the greenback rallied on Wednesday after two regional officials of the Federal Reserve said an interest-rate increase could be considered next month at a meeting of US central bank policymakers.
A stronger greenback makes oil, which is priced in dollars, more expensive for customers using rival currencies.
OPEC oil producer Iran has meanwhile been ramping up production after Western sanctions linked to its nuclear programme were lifted in January, further adding to the oversupplied market.
© 2016 AFP