Forexpros – Crude oil futures trimmed losses during U.S. morning trade on Wednesday, coming off the lowest level since November following a U.S. government report on oil supplies.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD93.80 a barrel during U.S. morning trade, shedding 0.2%.
It earlier fell by as much as 2.4% to trade at USD91.81 a barrel, the lowest since November 3, 2011.
Crude prices traded at USD93.28 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 2.1 million barrels in the week ended May 11, above expectations for a 1.7 million barrel increase.
U.S. crude supplies rose by 3.65 million barrels in the preceding week.
Despite the higher than expected build, markets blew a sigh of relief as the government report came a day after the American Petroleum Institute said that U.S. crude inventories soared by 6.6 million barrels last week.
Total U.S. crude oil inventories stood at 381.6 million barrels as of last week, the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
Total motor gasoline inventories decreased by 2.8 million barrels, compared to expectations for a modest 0.5 million barrel decline, after falling by 2.6 million barrels in the preceding week.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Oil prices were sharply lower before the supply data as investors cut their exposure to growth-linked assets amid mounting fears over the possibility of a Greek exit from the euro zone.
Oil futures have been on a rapid decline since the outcome of the May 6 elections in Greece, which threw the future of the country’s international bailout deal into doubt and fuelled fears over a possible Greek exit from the euro zone.
The June WTI contract has lost nearly 6.5% over the past eight trading sessions.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery was down 0.15% to trade at 111.27 a barrel, with the spread between the Brent and crude contracts standing at USD17.47.
Brent crude, the European benchmark, is more than 13% off its intraday high of USD128.38 hit on March 1.
A potential loss of Iranian oil supplies has helped underpin strong gains in oil prices during late last year and the first quarter of this year.
But revived talks between Iran and major powers over Tehran’s nuclear ambitions, along with rising Saudi Arabian and Libyan output and signs of slower U.S. economic and employment growth, helped pull oil prices back from first-quarter highs.
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