Oil prices dip on signs of bigger-than-expected US inventory build

Oil prices fell in Asian trade on Wednesday after industry data showed a bigger than expected build in U.S. inventories, while focus remained on potential supply disruptions due to a hurricane in the Gulf of Mexico. 

Markets were also watching the U.S. presidential election and a top political meeting in China for more cues.

Brent oil futures expiring in January fell 0.6% to $75.11 a barrel, while West Texas Intermediate crude futures fell 0.5% to $71.24 a barrel by 20:11 ET (01:11 GMT). 

Oil prices were sitting on some gains in recent sessions, after the Organization of Petroleum Exporting Countries and allies (OPEC+) delayed plans to begin increasing production this year. Some expectations of U.S. supply disruptions also buoyed crude, as did weakness in the dollar.  US inventories grow more than expected- API 

Data from the American Petroleum Institute showed U.S. oil inventories grew 3.1 million barrels in the week to November 1, much more than expectations for a build of 1.8 mb.

Product inventories- gasoline and distillates- saw small draws.

The API data usually heralds a similar reading from official inventory data , which is due later on Wednesday. The reading spurred some concerns that U.S. fuel demand was cooling, especially as the winter season approaches. 

U.S. production is also expected to have remained near record highs of over 13 mb a day, keeping supplies in the country relatively high.

But U.S. oil production is expected to face some disruptions in the coming days, especially as energy firms began evacuating workers in the Gulf of Mexico ahead of Hurricane Storm Rafael, which is expected to make landfall in Louisiana later this week. 

The storm strengthened into a category-1 hurricane on Tuesday.  Oil markets brace for busy week 

Risk appetite among crude markets was still limited, as traders braced for a string of major signals due in the coming days.

The biggest point of focus was on the 2024 presidential election, with early coverage from the Associated Press showing Donald Trump pulling ahead of Kamala Harris. But a bulk of the votes still remain to be counted.

Beyond the election, focus this week is on a meeting of China’s National People’s Congress, where Beijing is widely expected to outline more plans for fiscal spending.

A Federal Reserve meeting is also in focus, with the central bank widely expected to cut interest rates by 25 basis points on Thursday.

Source: Investing.com