Crude oil futures moved lower in midmorning New York trading Aug. 3 following a larger-than-expected build in US crude inventories.
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Register NowAt 1445 GMT, NYMEX September WTI was down $1.42 at $93/b and ICE October Brent was $1.33 lower at $99.21/b.
US commercial crude stocks climbed 4.5 million barrels in the week to July 29 to about 426.6 million barrels, Energy Information Administration data showed Aug. 3. The build left stocks 6.7% behind the five-year average, in from 7.7% the week prior.
American Petroleum Institute data released late Aug. 2 had shown a 2.17 million-barrel build in US crude supply in the week to July 29, while analysts surveyed by S&P Global Commodity Insights Aug. 1 had expected a 1.7 million-barrel draw over the period.
Notably, the EIA report showed a 4.7 million-barrel draw from the US Strategic Petroleum Reserve, meaning total US crude inventories edged 200,000 barrels lower to 896.6 million barrels -- a fresh 18-year low.
NYMEX September RBOB gasoline was down 5.90 cents at $2.9977/gal while September ULSD traded 3.83 cents higher at $3.4187/gal.
Oil markets were already trading heavy overnight amid heightened US-China tensions following House Speaker Nancy Pelosi's Aug. 2 visit to Taiwan. Beijing has strongly condemned the visit and announced it would carry out a series of military drills near Taiwan in the coming days.
The potential threat of military action from China has underscored already volatile supply chains and any economic repercussions from an escalation of tensions.
"The market is looking for the net impact of the Taiwan situation," Ron Smith, senior oil and gas analyst at BCS Global, said Aug. 3. "There might be economic repercussions in a time when supply chains are already fragile. So the [crude oil] market might see the impact of heightened tensions."