NEW YORK: Oil prices hovered near six-month highs on Wednesday after data showed US crude stockpiles surged to their highest levels since October 2017, countering fears of tight supply resulting from OPEC output cuts and US sanctions on Venezuela and Iran.
Brent crude futures rose six cents to settle at US$74.57 a barrel. The international benchmark reached US$74.73 a barrel on Tuesday and Wednesday, highest since Nov 1.US West Texas Intermediate crude futures were under more pressure from the build in domestic stocks, and ended 41 cents lower at US$65.89 a barrel. On Tuesday, WTI hit US$66.60, the highest since Oct 31, report agencies.
US crude inventories rose 5.5 million barrels last week, the Energy Information Administration said, far more than analysts' forecast of an increase of 1.3 million barrels.
Crude output in the United States, which turned into the world's top producer last year, last week edged back to its record high at 12.2 million barrels per day while net imports jumped 900,000 bpd, EIA data showed.
However, refinery utilisation rates rose to 90.1 per cent of total capacity, their highest since early February.
The build in crude stockpiles was "bearish, especially developing in spite of a larger-than-expected jump in US refinery runs of almost 2.5 per cent of capacity," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Crude futures and prices for spot delivery rallied after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action. The move raised worries about tighter global oil supplies.The United States must be prepared for consequences if it tries to stop Iran from selling oil and using the Strait of Hormuz, Iran's foreign minister, Mohammad Javad Zarif, warned on Wednesday.
China, Iran's biggest oil customer, has formally complained about the move.
The spot price surge put the Brent forward curve into steep backwardation, in which prices for later delivery are cheaper than for prompt dispatch.
The United States has said it saw Saudi Arabia as a partner to balance oil markets.