Oil prices fell on Tuesday after Saudi Arabia reiterated it would aim to keep the market balanced and try to reduce tensions in the Middle East, while industry data showed a surprise increase in U.S. crude inventories.
Brent crude futures were down 37 cents, or 0.5 per cent at $71.81 at barrel having risen 21 cents on Tuesday, while the U.S. West Texas Intermediate (WTI) crude futures for July delivery were down 54 cents, or 0.9 per cent, at $62.59. The June contract, the previous front-month contract which expired on Tuesday, settled at $62.99 a barrel, down 11 cents.
Saudi Arabia’s council of ministers repeated the country’s commitment to balancing global oil markets and preventing regional conflict amid tensions between Iran and the United States, state media reported on Wednesday.
The kingdom “will do everything in its power to prevent any war and its hand is always extended to peace,” a cabinet statement said, adding the government was committed “to achieving balance in the (oil) market and working towards its stability on a sustainable basis.”
U.S. President Donald Trump on Monday threatened Iran with “great force” if it attacked U.S. interests in the Middle East.
On Tuesday, acting U.S. Defense Secretary Patrick Shanahan said that while threats from Iran remained high, deterrence measures taken by the Pentagon had “put on hold” the potential for attacks on Americans. He did not provide details.
Tensions have risen after Trump reimposed sanctions on Iranian oil and other exports to try to strangle the country’s economy and force Tehran to talks on its nuclear programme.
The moves come in an already tight market as the Organization of the Petroleum Exporting Countries, Russia and other producers have withheld supply to support prices since the start of the year.
The American Petroleum Institute said late on Tuesday that U.S. crude stockpiles rose unexpectedly last week, by 2.4 million barrels, compared with analysts’ expectations for a decrease of 599,000 barrels.
Official data from the U.S Energy Information Administration’s oil stockpiles report is due later on Wednesday.