NYMEX crude oil trades weaker near $68 per barrel Wednesday after a 2% decline in previous session. Crude weakened as API weekly report noted an unexpected increase in US crude oil stocks.
API weekly report noted a 5.59 million barrels increase in US crude oil stocks as against market expectations of 2.3 mn bbl decline. API also noted a smaller than expected 0.791 mn bbl decline in gasoline stocks and a bigger than expected 2.89 mn bbl rise in distillate stocks. Focus now will be on EIA weekly report at 2000 IST.
Also weighing on crude is prospect of higher supply from OPEC and allies. As per Reuters survey, OPEC hiked production by 70,000 barrels per day to 32.64 million bpd, a 2018 high. Russia's energy minister last Friday indicated that a coalition of producers could pump more crude than agreed by the end of the year.
Supply worries relating to Saudi exports eased as Yemen's Houthi group said Tuesday that it would unilaterally halt attacks in the Red Sea for two weeks to support peace efforts. Saudi Arabia suspended oil exports through a strategic Red Sea channel following attacks on crude tankers last week.
Crude is also pressurized by trade war worries. As per reports, the Trump administration plans to propose slapping a 25% tariff on $200 billion of imported Chinese goods after initially setting them at 10%. A public comment period on the proposed US tariffs of 25% on $16 billion of Chinese imports ended Tuesday and could be applicable soon.