Futures dropped 1.3 percent in New York after rising 0.3 percent on Tuesday. Motor-fuel inventories climbed by 9.2 million barrels last week, the American Petroleum Institute was said to report. That would be the biggest gain since January 2016 if replicated in government data due later on Wednesday. Nationwide crude stockpiles declined, according to the API data. “This bears all the hallmarks of a year-end lull in U.S. fuel demand, which in turn should help safeguard the current bout of range-bound trading,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. Click Read More below for additional information.
US crude oil prices have slipped back after strong gains as the White House prepared to announce a decision on whether it will withdraw from the Iran nuclear deal.
US president Donald Trump wrote on Twitter on Monday that he would announce his decision on the Iran deal from the White House at 2pm on Tuesday. Mr Trump has repeatedly criticised the agreement between Iran and the US and its partners. If he opts to reimpose sanctions on Iran, it would probably entail reductions in the country’s oil exports and deliver a jolt to international markets.
Iran’s oil production has bounced back to nearly 4m barrels a day since world powers eased sanctions over its nuclear programme. Reimposing sanctions could reduce Iranian oil exports by 200,000-300,000 barrels a day, according to RBC Capital Markets.
Robust demand propelled by solid global economic growth, along with cuts in output co-ordinated by the Opec cartel, has diminished surplus oil stocks and left the market more sensitive to shocks. Concerns over supplies have also centred on Venezuela as economic turmoil dents its crude sales.