Oil Futures Dip on Wednesday

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil futures and Brent crude on the Intercontinental Exchange edged down in overnight trade after a larger-than-expected build in U.S. crude oil inventories was reported by American Petroleum Institute, while political turmoil in Venezuela limits losses.

Nymex June West Texas Intermediate was down $0.55 near $68.35 per barrel (bbl) in early trading, with the ICE July Brent contract easing $0.25 to about $71.75 bbl. Nymex June RBOB futures were up 0.35 cents near $2.0705 gallon, and June ULSD futures dipped fractionally to $2.0760 gallon.

The API said late Tuesday U.S. commercial crude inventories increased by a much larger than expected 6.81 million bbl last week, far above calls for a build of 1.4 million bbl. API data also showed gasoline inventories fell 1.06 million bbl, just above market projections of 1 million bbl draw, while distillates dropped 2.06 million bbl, above calls for 1.2 million bbl decline.

Energy Information Administration will release official supply figures at 10:30 a.m. ET.

In Venezuela, a massive uprising broke out on Tuesday after opposition leader Juan Guaido urged the military to oust incumbent President Nicholas Maduro. According to Reuters, Venezuela's opposition leader called for new protests Wednesday morning, as embattled president declared an attempted "coup" had failed against him.

Meanwhile, U.S. President Donald J. Trump is threatening a complete blockade and highest levels of sanctions against Cuba, if the country's military doesn't cease operations in Venezuela. International tensions heightened on Wednesday, as U.S. Secretary of State Mike Pompeo said Maduro was getting ready to board his plane to leave Venezuela, but was stopped at the direction of Cubans and Russians.

Oil futures continue to draw support from Saudi Arabia's deep production cuts under the production accord between Organization of the Petroleum Exporting Countries, Russia and nine other non-OPEC oil producers. Saudi's Energy Minister said on Monday global oil inventories are still above the normal level and some kind of extension to the deal may be needed beyond June.

Saudi Arabia drastically cut crude oil exports in April to below 7 million barrels per day (bpd), while keeping its production in the profiled month under 10 million bpd, the lowest level in nearly four years.

Liubov Georges can be reached at liubov.georges@dtn.com