Singapore — Crude oil futures were lower during mid-morning trade in Asia Wednesday, amid a surprise build reported in US crude stocks last week while ongoing global supply tightness capped the price fall.
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At 10:10 am Singapore time (0210 GMT), July ICE Brent crude futures were down 11 cents/b (0.15%) from Tuesday's settle to $71.13/b, while the NYMEX June light sweet crude contract lost 30 cents/b (0.49%) at $61.48/b.
According to analyst reports quoting data from the American Petroleum Institute, US crude stocks for the week ended May 13 rose by 8.6 million barrels.
Analysts surveyed Monday by S&P Global Platts were looking for US crude stocks to have declined by 2.3 million barrels for the same period.
The API also reportedly showed stockpile increases of 567,000 barrels in gasoline and 2.2 million barrels in distillates, analysts said.
More definitive numbers on last week's US inventory data is due for release from the US Energy Information Administration later Wednesday.
While the bearish report from the API, pushed prices lower, ongoing supply-side tensions elsewhere capped the price fall, analysts said Wednesday.
Tensions over threats to oil flows from the Middle East escalated sharply Tuesday, after an attack claimed by Houthi rebels halted flows through Saudi Arabia's main oil transport pipeline to the Red Sea.
Citing Saudi energy minister Khalid al-Falih, the Saudi Press Agency said Saudi Aramco's key East-West oil pipeline suffered limited damage from armed drones on Tuesday, referring to the incident as "terrorist and sabotage act."
The drone attack came just days after one of the biggest attacks on oil tankers near the Strait of Hormuz transit chokepoint, fueling concerns over a new wave of coordinated strikes on key oil infrastructure and transit routes in the Middle East.
"Tensions in the region were already intensifying after the Trump administration moved to tighten sanctions on Iran oil exports. This should see the risk premium on oil prices rise, despite the ongoing headwind that the US-China trade conflict has created," ANZ analysts said in a note Wednesday.
Meanwhile, OPEC's analysis arm said Tuesday that it expects the global oil market to tighten further in the coming months amid renewed geopolitical tensions, but kept its 2019 oil demand growth figure steady as the "upside potential for global economic growth in 2019 remains limited."
In its monthly oil market report, OPEC estimates that demand for its crude will average 30.58 million b/d in 2019, a fall of 1.01 million b/d on the year, suggesting that global oil inventories are going to decline sharply from current levels.
OPEC crude output remained largely rangebound in April, with output falling 3,000 b/d from the previous month to 30.031 million b/d, according to the monthly report.
Market participants would be watching out for the OPEC/non-OPEC monitoring committee meeting scheduled to be held at Jeddah on Sunday, analysts said.
As of 0210 GMT, the US Dollar Index was down 0.02% at 97.34.
--Avantika Ramesh, avantika,firstname.lastname@example.org
--Edited by Geetha Narayanasamy, email@example.com