NEW YORK: Oil prices were near flat on Wednesday, after earlier hitting a 10-month high, as a surprise build in US crude inventories offset expectations of tight crude supply for the rest of the year.
International benchmark Brent futures dropped 7 cents to $91.99 a barrel by 12:48 p.m. EDT (1648 GMT). Its session high of $92.84 a barrel was the highest since November.
US West Texas Intermediate crude (WTI) edged 11 cents lower to $88.73. Its session high of $89.64 a barrel was also the highest since November.
Front-month Brent futures contracts traded as high as $4.90 a barrel above those for delivery six months further out, the widest spread since November, indicating tightening supply.
A lack of big price moves in recent weeks has cut Brent’s historic or actual 30-day close-to-close futures volatility to its lowest since July 2021.
Prices gained despite government data that showed US crude, gasoline and distillate inventories rose last week.
US crude inventories rose by 4 million barrels last week, confounding analysts’ expectations in a Reuters poll for a 1.9 million-barrel drop.
“The big picture is the extended voluntary production cuts by Saudi Arabia and Russia,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
Those two countries have extended production cuts of 1.3 million barrels per day (bpd) of crude to the year end, which will lock in a substantial market deficit through the fourth quarter, the International Energy Agency (IEA) said.
The continuing supply cuts could lift Brent futures above the $100 a barrel threshold before the end of the year, Bank of America analysts said.
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