Oil falls as market weighs supply worries, fuel inventories grow

Oil pump jacks are seen at the Vaca Muerta shale oil and gas storage facility in the Patagonian province of Neuquen, Argentina, Jan. 21, 2019. REUTERS/Agustin Marcarian/File Photo

SINGAPORE, June 30 (Reuters) – Oil prices fell amid volatile trading Thursday as the market weighed in on concerns over global supply and an increase in US inventories of fuel products.

September Brent oil futures, the more actively traded contract, fell 45 cents, or 0.4%, to $112.00 a barrel at 0711 GMT.

The August contract, which expires Thursday, stood at $115.15, down $1.11 a barrel or 1.0%.

US West Texas Intermediate (WTI) crude futures fell 57 cents, or 0.5%, to $109.21.

“The net decline in crude oil inventories has been flattered by the release of SPRs, while the increase in gasoline inventories is due to U.S. refineries operating at over 95.0% capacity,” said Jeffrey Halley, senior OANDA market analyst for Asia-Pacific.

Crude oil inventories fell 2.8 million barrels in the week to June 24, far exceeding analyst expectations in a Reuters poll for a drop of 569,000 barrels, data from the US Energy Information Administration shows, though the US gasoline and distillate inventories rose. read more

Fuel inventories rose as refineries ramped up operations and operated at 95% capacity, the highest for this time of year in four years.

But further supply disruptions curtailed price falls, ANZ analysts said, amid a suspension of Libyan shipments from two key eastern ports as Ecuador saw production plummet amid ongoing protests.

Exports of Ecuador’s flagship Oriente remain suspended over a force majeure statement as the spread of anti-government protests hurt oil production, state-owned Petroecuador said on Wednesday. read more

Meanwhile, the OPEC+ group, which includes allies such as Russia, began two days of meetings on Wednesday, although sources said there was little prospect of pumping more oil. read more

Reporting by Jeslyn Lerh in Singapore and Arathy Somasekhar in Houston; adaptation by Kim Coghill and Jason Neely

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