Oil falls as US crude inventories rise despite Saudi supply concerns

Oil prices dipped on Wednesday following a surprise increase in U.S. crude inventories, while investors weighed the potential impact of Saudi Arabia's suspension of oil loads from its Yanbu port. Brent crude futures slipped 93 cents, or 0.86%, to $107.82 a barrel, and U.S. West Texas Intermediate futures declined 97 cents, or 0.92%, to $104.86 a barrel.

Both benchmarks had risen over $3 on Tuesday to their highest levels since May 19, as the suspension of the Yanbu loading raised supply concerns and Saudi Arabia reduced oil shipments to Europe and the U.S. Crude oil, gasoline, and distillate inventories all increased last week, according to market sources citing data from the American Petroleum Institute.

Crude inventories rose by 7.1 million barrels in the week ending September 11, exceeding analysts' expectations for a reduction of around 1.6 million barrels, according to a Reuters poll. API's data revealed unexpected increases in gasoline and diesel inventories, contributing to the price decline, but regional stock accumulations do not alter the inherent scarcity in the global crude market, as noted by Haitong Futures.

Reports indicated that the loading of oil at Saudi Arabia's Yanbu port had been halted after the world's largest crude exporter shut its East-West pipeline following an attack by Yemen's Iran-aligned Houthi rebels on Friday. The U.S. energy secretary stated that the pipeline should resume operations within days; however, various estimates indicated that the situation could persist for five to six weeks or even resume with partial pumping earlier than initially projected.

In Libya, unrelated to the ongoing Iran conflict, the National Oil Corporation reported that operations at three oil fields were suspended when protesting members of the Petroleum Facilities Guard closed a valve on the Hamada-Zawiya crude export pipeline. Yet, Libya's oil production remained largely unaffected by the shutdowns, maintaining a level of about 1.4 million barrels per day, as stated by NOC Chairman Massoud Suleman.