Oil prices recover as weekly US crude inventories fall

Oil prices recovered slightly from earlier losses on Wednesday after data showed a decline in weekly US crude inventories.

At 1549 BST, Brent crude rose 0.12% to $49.29 per barrel while West Texas Intermediate fell 0.38% to $46.40 per barrel.

The Energy Information Agency said US weekly crude inventories fell by 2.5m barrels last week to 521.1m barrels. It was more than the 200,000-barrel fall expected by analysts polled by S&P Global Platts.

However, the EIA noted that oil inventories are at “historically high levels for this time of year”.

Gasoline supplies also slid 2.7m barrels, while distillate stockpiles increased 1.9m barrels last week.

Crude prices were sitting lower earlier on Wednesday following a report that Saudi Arabia plans to boost its production in August to a record level.

Saudi Arabia started to raise output from June after holding it steady for the first half the year and this month the nation looks set to overtake Russia with its production levels, sources told Reuters.

Saudi Arabia produced 10.55m barrels of oil per day (bpd) in June, and increased output to a record 10.67m bpd in July.

The report comes ahead of a meeting in September between OPEC and non-OPEC members to address ways to stabilise the market. A supply glut coupled with lack of demand has weighed on oil prices in recent months.