Oil plunges almost 5% as crude stocks rise for first time in 9 weeks

Investing.com - Oil prices plunged to the lowest level in around a month in North American trading on Wednesday, after data showed that U.S. crude supplies rose for the first time in nine weeks, underlining worries over a global supply glut.

The U.S. West Texas Intermediate crude July contract was at $46.09 a barrel by 10:35AM ET (1435GMT), down $2.10, or around 4.4%, after falling to its lowest since May 10 at $45.98. Prices were at around $47.61 prior to the release of the inventory data.

Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London sank $1.82 to $48.28 a barrel, a level not seen since May 5.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 3.3 million barrels in the week ended June 2.

Market analysts' expected a crude-stock decline of 3.4 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of about 4.6 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 1.4 million barrels last week, the EIA said.

Total U.S. crude oil inventories stood at 513.2 million barrels as of last week, which the EIA considered to be at the upper half of the average range for this time of year.

The report also showed that gasoline inventories increased by 3.3 million barrels, disappointing expectations for a gain 580,000 barrels.

For distillate inventories including diesel, the EIA reported a rise of 4.4 million barrels.

Meanwhile, investors continued to weigh the impact of diplomatic tensions between Qatar and other Middle Eastern nations, including Saudi Arabia, on an OPEC-led push to tighten the market.

With oil production of about 620,000 barrels per day, Qatar's crude output ranks as one of the smallest among OPEC producers, but tension within the cartel could weaken an agreement to hold back production in order to prop up prices.

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand remained in focus.

Elsewhere on Nymex, gasoline futures for July dropped 2.9 cents, or about 1.9%, to $1.496 a gallon, while July heating oil slipped 4.0 cents to $1.425 a gallon.

Natural gas futures for July delivery rose 0.8 cents to $3.050 per million British thermal units.

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