Oil plunges after the announcement of an increase in US crude inventories, but the market remains tense

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices fell on Wednesday after a report reveals an increase in US crude stocks available, but the market remained tense in the face of the intensification of the political crisis in Venezuela, the United States. tightening of sanctions imposed on Iran and continued cuts in OPEC supply.

The international benchmark for oil prices, the spot Brent, stood at $ 71.65 a barrel at 0143 GMT, down 41 cents (0.6%) from their latest fenced.

The US WTI (US West Texas Intermediate) futures price fell 51 cents, or 0.8%, to $ 63.49 per barrel.

US crude inventories rose 6.8 million barrels to 466.4 million barrels in the week to 26 April, an industry group, the American Petroleum Institute (API), said on Tuesday. from the supply of US crude.

"Crude prices are down … after the weekly report on API oil stocks showed an accumulation of 6.8 million barrels, compared to 3.1 million barrels last week" said Edward Moya, senior market badyst at Oanada, a futures broker.

However, the main oil producer in Venezuela, where the gap between incumbent President Nicolas Maduro and opposition leader Juan Guaido was at a standstill, focused on the crisis. Many observers are concerned that this will lead to widespread violence, as well as a disruption in the supply of crude oil.

Crude markets have tightened this year due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and increased US sanctions on Iran's oil exports.

Washington re-imposed sanctions on Tehran last November, but initially allowed its major buyers to import limited volumes of crude oil for another six months.

This period will expire on Wednesday and Washington has announced that it will not extend any sanctions exemption to the extent that it aims to wipe out Iranian crude exports.

Despite this, some badysts believe that global oil markets are largely fueled.

Stephen Innes, transaction manager at SPI Asset Management, said that OPEC "could quickly offset the losses incurred by Iranian suppliers with relative ease."

OPEC is scheduled to meet in June to discuss its production policy. While Washington has lobbied the group to increase production in order to make up for the shortfall of Iran, Saudi Arabia, de facto leader of OPEC, said Tuesday it did not have immediate projects. increase production.

"The game plan (for OPEC) could consist of maintaining a floor price rather than openly raising prices," Innes said.

(Report by Henning Gloystein, edited by Joseph Radford)