Global crude oil prices declined, with West Texas crude nearing a break below 104 dollars per barrel and Brent falling below 108 dollars per barrel, after the United States reported a much larger-than-expected rise in crude inventories last week. The American Petroleum Institute said crude stockpiles increased by 7.1 million barrels, contrary to analysts' expectations of a 1.6 million barrel decline. The US Energy Information Administration is due to release its inventory data tonight. Meanwhile, investors are watching the Middle East situation, with US Energy Secretary Chris Wright saying Saudi Arabia will soon reopen the East-West Pipeline after it was shut down by an attack from Iran-backed militants. The pipeline is 1,200 kilometres long and carries about 4 to 5 million barrels per day, or roughly 4 to 5 percent of global oil supply, and allows Saudi Arabia to ship crude without passing through the Strait of Hormuz. At the same time, a meeting between Iran and various Persian Gulf regional countries, scheduled for Monday in Salalah, Oman, has been postponed.
Larger-than-expected US inventory build and Saudi Arabia reopening the 4-5M bpd East-West pipeline add supply, weighing on Brent.
US crude inventories surged 7.1M barrels vs expected 1.6M decline, signaling oversupply that pressures WTI.
