Oil falls after industry data points to jump in US crude stocks

Oil

Oil prices slipped in early Asian trade on Wednesday after falling by more than $1 a barrel in the previous session as industry data pointed to a much bigger-than-expected surge in U.S. crude inventories.

Brent crude futures lost 20 cents to $85.38 per barrel by 0111 GMT, while U.S. West Texas Intermediate (WTI) crude futures shed 19 cents to $78.87.

U.S. crude inventories rose by about 10.5 million barrels in the week ended Feb. 10, according to market sources citing American Petroleum Institute figures on Tuesday.

The build was much larger than the 1.2 million-barrel rise that nine analysts polled by Reuters had expected, potentially pointing to a drop in fuel demand.

Gasoline stocks rose by about 846,000 barrels, while distillate stocks rose by about 1.7 million barrels, according to the sources, who spoke on condition of anonymity.

Official government inventory estimates are due at 10:30 a.m. EST (0330 GMT) on Wednesday.

Also weighing on crude prices was a U.S. Department of Energy (DOE) announcement this week that it would sell 26 million barrels of oil from the nation's strategic reserve, which is already at its lowest level in roughly four decades.

Helping to support prices, the Organization of the Petroleum Exporting Countries (OPEC) raised its 2023 global oil demand growth forecast in its first upward revision for months, on China's reopening, and trimmed supply forecasts for major non-OPEC producers, indicating a tighter market.

Global oil demand will rise this year by 2.32 million barrels per day (bpd), or 2.3%, OPEC said, raising the forecast from February by 100,000 bpd.