Crude oil prices drifted lower on Wednesday, extending losses to a second straight session, after having climbed sharply higher on Monday amid an escalation in geopolitical tensions after the drone attacks on Saudi’s oil facilities.
Oil’s decline on Wednesday was due to the data showing an increase in U.S. crude stockpiles last week and a sooner than expected recovery in Saudi Arabia’s output levels.
West Texas Intermediate Crude oil futures for October ended down $1.23, or about 2.1%, at $58.11 a barrel.
On Tuesday, WTI crude oil futures for October plunged $3.56, or 5.7%, to 59.34 a barrel, a day after soaring more than $8 a barrel.
Data released by the Energy Information Administration Wednesday morning showed crude inventories in the U.S. rose by 1.06 million barrels in the week ended September 13, compared with expectations for a drawdown of 2.5 million barrels.
Gasoline inventories were up by 780,000 barrels last week, as against forecasts for a drop of 540,000 barrels. Meanwhile, distillate stockpiles increased by 440,000 barrels, compared with forecasts for a rise of 535,000 barrels.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.
Meanwhile, U.S. President Donald Trump President Donald Trump revealed in a post on Twitter on Wednesday that he has ordered Treasury Secretary Steven Mnuchin to impose additional sanctions on Iran.
The announcement follows the attacks on Saudi Arabian oil facilities over the weekend, with the U.S. pointing the finger at Iran.
“I have just instructed the Secretary of the Treasury to substantially increase Sanctions on the country of Iran!” Trump tweeted.
Trump previously indicated the U.S. was prepared to respond militarily but stopped short of definitively blaming Iran for the attacks.
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