Oil prices fell more than 1% on Wednesday as a stronger USD and a large build in US fuel inventories last week weighed on prices and reversed earlier gains driven by supply tightening from Russia and other OPEC members.
Brent crude fell 89 cents (1.16%) to $76.23 a barrel. US West Texas Intermediate crude fell 93 cents (1.25%) to $73.32.
Both benchmarks had risen more than 1% earlier in the session.
Andrew Lipow, president of Lipow Oil Associates, said the oil market was being pressured by the significant build in gasoline and diesel inventories we have seen over the past few weeks.
Data from the US Energy Information Administration showed gasoline stocks rose by 6.3 million barrels last week to 237.7 million barrels, compared with analysts’ expectations in a Reuters poll for a build of 1.5 million barrels.
Distillate stocks rose by 6.1 million barrels in the week to 128.9 million barrels, compared with expectations for a 600,000-barrel increase.
Those factors come as a stronger U.S. dollar weighs on prices and makes oil more expensive for holders of other currencies.
In Russia, oil production averaged 8.971 million barrels per day in December, below the country's target, according to a Bloomberg report.
Analysts expect oil prices to fall on average this year from 2024 due to rising output from non-OPEC countries
