Oil prices fell slightly on Wednesday after U.S. government data showed an unexpected increase in crude oil inventories, but crude oil futures prices remained near five-month highs as production cuts led by the Organization of Petroleum Exporting Countries (OPEC) and sanctions on Iran tightened supply prospects.
Brent crude oil futures closed at $69.31 a barrel, down $0.06. The peak rose to $69.96, the highest since November 12, when oil prices rose above $70.
U.S. crude oil futures settled at $62.46 a barrel, down $0.12, hitting an intraday high of $62.99 since November 7 last year.
U.S. crude oil inventories increased by 7.2 million barrels last week as net imports climbed, yields rose slightly to record highs and refinery capacity utilization slowed, according to the Energy Information Association of the United States (EIA). Analysts had expected crude oil production to decline by 425,000 barrels.
"The increase in crude oil imports and the decline in exports mean a substantial increase in net imports. Crude oil processing continues to be below normal, "said Carsten Fritsch, an analyst at Commerce Bank of Germany." All this has contributed to a substantial increase in inventories.
Despite the sharp increase in U.S. crude oil inventories, market participants said oil prices would rise as global supply tightened and demand rebounded.
Three of the eight countries in which the U.S. government exempts oil imports from Iran have cut their purchases to zero, a U.S. official said Tuesday. The official added that improved oil market conditions would help further reduce Iranian crude oil exports. These indicate that oil market supply will be further tightened.
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