- Oil prices slipped to their lowest level in almost six weeks amid indications that more supply is on the way.
- Inventories at the main delivery hub for US oil futures saw their first weekly increase after five straight declines.
- The IEA forecast earlier that it sees US producers ramp up their oil production.
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US oil prices slipped to their lowest in more than a month Wednesday amid a growing number of indications that could signal more supply.
Inventories at Cushing, Oklahoma — the delivery hub for the West Texas Intermediate crude futures contracts — rose by 216,000 barrels last week, according to the Energy Department's status report.
That marked the first increase after five consecutive declines and could be a clue on where the benchmark US oil price is headed.
WTI slipped 3% to settle at $78.36 per barrel on Wednesday, its lowest finish since October 7. Last month, oil prices hit the highest levels in seven years as major economies around the world simultaneously restarted after the devastation brought about by the pandemic lockdown.
Oil prices came under pressure earlier Wednesday, after the International Energy Agency's monthly report on Tuesday said rising supplies could ease tightness in crude markets. The energy watchdog added that US producers will account for a major share of additional supplies coming at the end of this year and next year.
Also Tuesday, OPEC said the oil group sees signs of an oil supply surplus building up. That's after OPEC in October agreed to keep its existing schedule of gradual hikes in oil production, ignoring growing calls for opening the taps at a faster rate to bring down prices.
Meanwhile, President Joe Biden and Chinese leader Xi Jinping on Tuesday discussed the possibility of releasing more oil from their strategic petroleum reserves in a bid to control the unbalanced oil market, Bloomberg reported. Both countries have already made some releases.
While no final decisions were made, the fact the world's two largest economies are discussing this is a significant step as the rising oil prices continue to stoke an overheating global economy, Edward Moya, senior equity analyst at Oanda, said in a Wednesday note.
"If the US and China are unable to reach a quick agreement on a coordinated reserve release, WTI crude should quickly recover to the $80 level," he said. "A formal announcement could trigger further selling momentum for WTI crude that targets the $74 area."
Biden has been vocal about rising oil prices and their impacts on consumers. In August, he asked the FTC to monitor potential illegal conduct in the country's gasoline market and called on OPEC to boost output to keep up with consumer demand.
And on Wednesday, the president sent a letter to Federal Trade Commission Chair Lina Khan requesting she look into the "mounting evidence of anti-consumer behavior by oil and gas companies."