Oil prices fell on Wednesday after data showed that US crude inventories rose as traders continued to consider the conflict in the Middle East.
Brent crude oil, against which Nigerian oil is priced, shed $1.08, or 1.42 per cent to settle at $74.96 per barrel while the US West Texas Intermediate (WTI) crude oil dipped by 97 cents, or 1.35 per cent to $70.77.
The US Energy Information Administration (EIA) reported an inventory increase of 5.5 million barrels for the week to October 18.
The inventory change followed an American Petroleum Institute (API) estimate of a build totalling 1.64 million barrels for the reported period. It also compared with a draw of 2.2 million barrels for the previous week, as reported by the EIA last Thursday.
In petrol, the American authority estimated an inventory build of 900,000 barrels for the week to October 18, with production averaging 10 million barrels daily.
This compared with an inventory decline of 2.2 million barrels for the previous week when petrol production averaged 9.3 million barrels daily.
Market analysts noted that the crude inventory build is due to the recent hurricane in the US which curtailed production in the largest oil producer in the world.
Pressure also came as the US dollar index rose to its highest point in late July.
A strong US Dollar can hurt demand for oil, which is priced in the American currency, as it makes it more expensive for holders of other currencies.
The market also continued to monitor developments and concerns over potential oil supply risk from conflict in the Middle East.
On Wednesday, there was no tangible outcome from the US Secretary of State Antony Blinken’s latest visit to Israel.
Israel continues to pound both Gaza and Lebanon, and most recently it killed the next in line to the top spot at Hezbollah, Hashem Safieddine, sparking expectations of retaliation.
Mr Blinken pushed on Wednesday for a halt to fighting between Israel and militant groups Hamas and Hezbollah, but heavy air strikes carried out by Israel on a Lebanese port city Tyre showed that there is no calm in sight.
Market participants expect the conflict to go on longer and have taken advantage of the events unfolding to price longer.