Investing.com - West Texas Intermediate oil pared losses in North American trade on Wednesday, after data showed that oil supplies in the U.S. declined more than expected.
Crude oil for July delivery on the New York Mercantile Exchange fell 25 cents, or 0.3%, to trade at $71.06 a barrel by 10:32AM ET (14:32GMT) compared to $70.78 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 1.404 million barrels in the week ended May 11. Market analysts' had expected a crude-stock draw of 0.763 million barrels, while the American Petroleum Institute late Tuesday reported a build of 4.845 million.
Supplies at Cushing, Oklahoma , the key delivery point for Nymex crude, increased by 0.053 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 432.4 million barrels as of last week, according to press release, which the EIA considered to be “in the lower half of the average range for this time of year”.
The report also showed that gasoline inventories decreased by 3.790 million barrels, compared to expectations for a draw of 1.421 million barrels, while distillate stockpiles fell by 0.092 million barrels, compared to forecasts for a decline of just 2.155 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery slipped 5 cents, or around 0.1%, to $78.38 by 10:37AM ET (14:37GMT), compared to $77.85 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $7.15 a barrel by 10:38AM ET (14:38GMT), compared to a gap of $7.12 by close of trade on Tuesday.
The inventory data was released after the International Energy Agency (IEA) published its own monthly report earlier on Wednesday. The IEA cut its global demand forecast from 1.5 million barrels per day (bpd) to 1.4 million bpd due to the increase in prices. Looming sanctions against OPEC-member Iran by the U.S. has contributed to rising oil prices and the market is expected to tighten for the rest of the year, the agency said.
Investors continue to assess the implications of President Donald Trump walking away from the Iran nuclear deal earlier this month.
Market participants widely expect re-imposed sanctions to lead to tighter global oil supplies as they make it more difficult for Iran to export oil.
Iran, which is a major Middle East oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC), resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran's nuclear program.