Oil prices fell to a one-month low below $75 Wednesday after an industry report on Tuesday showed a sharp increase in petroleum inventories in top consumer the United States.
If the industry data is confirmed by another set of weekly figures from the US government due out later on Wednesday, it would send the combined crude and product inventories in the world’s top economy to a record high.
US crude oil futures fell $1, or 1,32%, to $74,77 a barrel by 1107 GMT, having hit $74,69 earlier, thelowest price since mid-July ICE Brent fell 97 cents to $75,96, after flipping into a premium to the US benchmark on Tuesday.
Late on Tuesday, industry group the American Petroleum Institute said US crude inventories rose by almost 5,9 million barrels last week.
The data also showed a 2 million barrel rise in gasoline inventories, which marked an unseasonal seven consecutive weeks of increases.
Stocks of the auto fuel typically fall during the summer holidays in the United States.
Middle distillate inventories, including diesel and heatingoil, rose for the 11th consecutive week.
“It looks like the oil product market is very comfortably supplied and that demand conditions remain lacklustre,” said.
Stefan Graber, a commodities analyst with Credit Suisse in Singapore.
New York RBOB gasoline was trading 1,44% lower, after hitting about a three month low earlier this week.
At 1530 GMT, US government’s Energy Information Administration (EIA) will release its own oil data for the week to August 13.
Analysts in a Reuters poll taken before the release of the API data expected the government figures to show a 1 million barrel drop in total crude oil inventories and a small fall in gasoline stocks.
JBC Energy in Vienna said the EIA data would be “scrutinised” for inventory levels at Cushing in Oklahoma, the delivery point of physical US crude.
High inventories at Cushing typically push North Sea benchmark Brent crude prices to a premium to US crude. Many investors put their money on moves of the spread between thesecrude oil contracts.
The premium of Brent has been around a two-month high since Tuesday. In the week to Aug. 6, Crude supplies at Cushing stood at 37,7 million barrels in the week to August 6, just shy of a record 37,9 million barrels in mid-May.
Oil prices are now centred near the mid-point of the $64,24-$87,15 trading range so far this year as increases in energy demand in emerging markets has been insufficient to drain ample supplies in other areas in the world.
The price level is also around the sweet spot of the $70-$80 range for the Organisation of the Petroleum Exporting Countries.