Oil prices were paring early gains on Wednesday after government data showed that US inventories of oil expanded last week, marking the eighth consecutive week in which stockpiles have increased.
West Texas Intermediate (WTI) crude oil, the main US benchmark, was trading 0.01% lower at $53.98 per barrel recently while Brent crude, the international gauge, was 0.02% higher at $56.52 per barrel. Earlier in the day WTI and Brent had traded for as much as $54.42 per barrel and $57.04 per barrel, respectively.
US inventories of oil rose by 1.5 million barrels to 520.2 million barrels in the week ended February 24, according to the Energy Information Administration’s (EIA) weekly oil report. This compared to a 0.6 million barrel weekly increase registered the previous week and a 2.5 million barrel weekly increase which had been projected by the American Petroleum Institute (API) on Tuesday.
Total motor gasoline inventories decreased by 0.5 million barrels, a lower reduction than the 2.6 million barrels drop seen in the prior week. Distillate fuel inventories decreased by 0.9 million barrels, also a fraction of the 4.9 million barrel contraction seen a week earlier, and propane/propylene inventories fell by 0.5 million barrels, a lesser drop than the 3.3 million barrels fall seen a week earlier. Commercial petroleum inventories decreased by 0.3 million barrels from a week earlier.
Also feeding into oil pricing sentiment on Wednesday was a higher greenback. As a dollar denominated commodity, a higher buck tends to make oil less affordable to international buyers. The Dollar Index, which tracks the value of the US currency against a basket of foreign currencies, was 0.30% higher at the time of writing.