Oil prices fell on Wednesday as investors weighed the intensifying war between Russia and Ukraine, and a rise in crude stocks in the United States.
Brent crude was down 46 cents or 0.63 percent at $72.85 a barrel while the US West Texas Intermediate (WTI) crude was down 29 cents, or 0.42 percent, at $69.10.
The conflict between Russia and Ukraine and subsequent concern around potential oil supply disruptions have helped shape the market so far this week.
Ukraine fired a volley of British Storm Shadow cruise missiles into Russia on Wednesday, the latest new Western weapon it has been permitted to use on Russian targets a day after it fired US ATACMS missiles.
Russia has said the use of Western weapons to strike into Russian territory far from the border would be a major escalation in the conflict.
Meanwhile, Ukraine says it needs the capability to defend itself by hitting Russian rear bases used to support the invasion, which entered its thousandth day this week.
Adding to the geopolitical tensions, the US vetoed a UN Security Council resolution for a ceasefire in Gaza on Wednesday and this has created criticism for the Biden administration for once again blocking international action aimed at halting Israel’s war with Hamas.
The development could buoy oil prices’ war risk premium on investors’ concerns around potential disruptions to global oil supplies as war in the Middle East continues.
There are also expectations that global supply could be further squeezed, with the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ potentially set to push back output increases again when it meets on December 1 due to weak global oil demand.
Pressure came after the US Energy Information Administration (EIA) reported an inventory build of 500,000 barrels for the week to November 15.
The change compared with a build of 2.1 million barrels for the previous week, and another one, of 4.75 million barrels, estimated by the American Petroleum Institute (API) for the week. However, both last week’s EIA report and this week’s API report saw declines in fuel inventories.
Norway’s Equinor said it had restored full output capacity at the Johan Sverdrup oilfield in the North Sea following a power outage.
