On Wednesday oil prices gave majority of their early gains back, with U.S crude moving into the red, on concerns that government data could display another large U.S. crude stock build despite supportive Canadian supply outages. Brent and U.S. crude West Texas Intermediate (WTI) futures increased earlier as Shell announced a Nigerian pipeline closure while Canadian energy firms tried to resume closed facilities that had stopped more than 1 million bpd in supply following a massive wildfire in Alberta’s oil sands region. In the last session, Brent gained 4% and WTI more than 2% on anticipation that record U.S. crude inventories would not increase as much as they have the past couple of weeks.
This was all before data from the American Petroleum Institute, indicating U.S. crude inventories increased by 3.45 million barrels to a record high of 543.1 million last week. Investors and traders will be waiting for official inventory data fro the United States Energy Information Administration. “Crude needs to start drawing soon or this market is in trouble,” stated Scott Shelton, broker with ICAP. He added that cutting supply out of Canada, which exports approximately 3.5 million bpd of oil sands output to the U.S. should be the reason why U.S. stockpiles decline. “I would think that the draws are coming and the market is going to be willing to wait for it.” Brent LCOc1 gained $0.17 at $45.69 per barrel during Wednesday morning’s trading session. WTI CLcI dropped $0.25 to $44.41.