LONDON: Brent crude oil fell on Wednesday as lingering worry about the global economy overshadowed relief that Spain avoided a ratings downgrade and optimism prompted by firm US corporate results.
Brent fell 33 cents to $113.67 a barrel by 0825 GMT. The November contract, which expired on Tuesday, closed 73 cents lower at $115.07, while December settled 40 cents lower at $114.00. US oil gained 9 cents to $92.18.
Brent gained in early trade after Moody's Investors Service affirmed its investment grade rating on Spain helping ease investor worries that the crisis in the region is worsening.
Investors were reluctant to buy into oil as concern about the demand outlook remained in focus, and crude stayed towards the lower side of its trading range.
"The battle continues between the negativity from the slowing of the global economy compared to what global stimulus programmes might do to the economy going forward while geopolitics has continued to remain an issue for market participants," said Dominick Chirichella of New York's Energy Management Institute.
Oil was supported by supply concerns, as the European Union slapped fresh sanctions on Iran.
European Union governments imposed sanctions against major Iranian state companies in the oil and gas industry and strengthened restrictions on the central bank.
The United States and the European Union are putting pressure on Iran to stop its disputed nuclear programme, while Tehran says it needs the technology to generate electricity.
STOCKPILES BUILD
Prices were also under pressure from data showing US crude inventories rose more than expected last week, while distillate stockpiles showed a surprise build, data from the American Petroleum Institute showed.
Crude inventories rose by 3.7 million barrels in the week to Oct. 12, against a build of 1.7 million forecast in a Reuters poll. Participants await a report later in the day by the US Energy Information Administration for details of the stockpile.
Market expectations for another "build in US crude stockpiles highlight bearish market sentiment over excess US oil supplies and these concerns could be magnified after this morning's American Petroleum Industry report showed an even higher build of 3.7 million barrels," analysts at ANZ said.
"(The) EIA report will be a key price driver, but in the meantime there could be a downward bias."
Adding to the improved supply picture, Saudi Arabia pumped around 9.77 million barrels per day (bpd) of crude oil in September, an industry source said.
The kingdom appears to be keeping its pledge to ensure global markets are well supplied with oil, as a Reuters analysis of US import data shows sales to the world's top consumer have dipped less than 10 percent from a four-year high hit this year.
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