Oil drops as US inventories jumps

Oil prices fell on the European market on Wednesday, dropping from the highest level in six months recorded earlier yesterday, with a marked activity of correction and profit taking, heading to the first loss in four days, as oil prices are under the pressure of the large rise in the commercial crude inventories in The United States, according to preliminary data from the American Petroleum Institute.

As of 08:45 GMT, US crude fell to $65.90 a barrel from the opening level of $66.15, with a high of $66.15 and a low of $65.77.

Brent crude fell to $74.10 a barrel from the opening level of $74.22 and recorded a high of $74.37 and a low of $74.00.

US crude added 0.8% yesterday, in the third consecutive daily gain, recording a six-month high at $66.58 a barrel. While Brent rose 0.4%, recording the highest level since November 1st at $74.71.

Oil prices have risen more than 3% since the start of the week, after the United States decided to end the exemptions granted to eight buyers of Iranian oil by May 1st.

Britain's Barclays Bank said that Washington's goal of cutting Iran's oil exports to zero was a bullish threat to the average price of Brent crude at $70 a barrel this year from an annual average of $65 per barrel.

In preliminary data, the US Petroleum Institute announced yesterday that the country's trade inventories rose by 6.9 million barrels in the week ending April 19th, the fourth increase in the past five weeks, exceeding experts' expectations of a rise of 1.3 million barrels.

According to the data, total US commercial inventories rose to 458.7 million barrels, the highest level of US stockpiles since October 2017, in a negative sign of demand levels in the world's largest oil consumer.

Traders are looking ahead to the official data for commercial inventories and production levels in the weekly report of the US Energy Agency later today, and expectations are for inventories to rise by 0.9 million barrels, the fourth increase over the past five weeks.