Oil prices slip after surprise US crude inventory build

NEW YORK: Oil prices edged lower on Wednesday after government data showed U.S. crude stocks unexpectedly rose last week, though disruptions to Venezuela's crude exports limited losses.

Brent crude futures lost 1 cent to $67.96 a barrel at 10:48 a.m. EST (1448 GMT). U.S. crude futures fell 24 cents to $59.70 a barrel.

U.S. crude inventories rose last week by 2.8 million barrels, compared with analysts' expectations for a decrease of 1.2 million barrels, the U.S. Energy Information Administration said.

"The report was bearish relative to expectations, as crude inventories rose due, in part, to a steep drop in exports week-on-week," said John Kilduff, a partner at Again Capital LLC in New York. "The rise in crude oil inventories at Cushing was another bearish data point."

Crude stocks at the Cushing, Oklahoma, delivery hub  rose by 541,000 barrels and exports fell 506,000 barrels, the EIA said.

Venezuela's main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month.

Crude exports from the key OPEC member have dropped sharply since Washington banned U.S. refiners from buying Venezuelan oil in January.

Oil prices have risen more than 25 percent this year, supported by supply curbs by the Organization of the Petroleum Exporting Countries and other major producers, along with U.S. sanctions on exports from Venezuela and Iran.

Disruptions in the United States have also lent support.

The U.S. Coast Guard on Monday reopened portions of the Houston Ship Channel with restrictions on waterways affected by a petrochemical leak and fire outside Houston that have disrupted ship traffic.

Crude flows from two key shale basins to the Cushing, Oklahoma delivery point for U.S. crude futures slowed in March due to winter production outages, dealers said.

Hedge funds and other money managers have increased bets that demand for oil will be sustained, even as the market rallied last week.