The front-month contract for Brent crude North Sea oil was last seen down USD 0.04 at USD 79.66/bbl, while the WTI equivalent was USD 0.05 lower at USD 74.17/bbl.
The fall came after the US Energy Information Administration (EIA) reported a weekly increase of 2.9m barrels in crude inventories.
“This contrasts with the anticipated decrease of 2.233m barrels and the prior substantial drop of 4.259m barrels,“ said Akhtar Faruqui of FXStreet.
“The unexpected inventory build contributes to the bearish sentiment in the crude oil market,“ he added.
This was compounded by the EIA also reporting that crude output “reached a record 13.3m barrels per day in the last week“.
Inventories were, however, about 1% below the five-year average for this time of the year at 443.7m barrels, the agency added.
Supply chain issues
“However, the Red Sea supply chain disruption may continue to offer a bullish factor,“ said Tina Teng of CMC Markets in a note.
The Red Sea is a key waterway that vessels passing through the Suez Canal – a main conduit between Asia and Europe – must transit.
“An increasing number of attacks on vessels transiting through the Red Sea has kept shipping players on their toes,” agreed analysts at Rystad Energy.
Oil giant BP said on Tuesday it was halting shipments in the area, with other firms following suit.
“At this point, the near-term trend [for Brent crude] stays bullish. There is plenty of room to gain additional momentum,” said Vladimir Zernov of FX Empire, referring to the volatility in the oil-producing Middle East region.