Oil prices fell Wednesday after U.S. stocks and fuel supply tightened, and the Saudi energy minister warned speculators of more OPEC+ output restrictions.
By 0645 GMT, Brent crude futures increased 74 cents, or 1%, to $77.58, while WTI rose 84 cents, or 1.2%, to $73.75 a barrel.
Brent climbed $1.03 to $77.87 a barrel. WTI rose $1.07 to $73.98.
“Oil is starting to turn bullish after the Saudi threat to short-sellers,” said OANDA senior analyst Edward Moya, adding that Saudi Arabia will likely do “whatever it takes to defend prices.”
After Saudi Arabia’s oil minister warned short sellers to “watch out,” supply concerns grew.
At a June 4 meeting, OPEC+, which includes Russia, may explore further output restrictions, according to some investors.
On Wednesday, CMC Markets analyst Tina Teng noted that oil prices rose on expectations that OPEC+ may cut output further to stabilize prices.
U.S. crude oil and fuel inventories decreased dramatically late Tuesday, increasing oil prices.
Market sources quoting API data reported a 6.8 million-barrel drop in crude stockpiles in the week ended May 19. In addition, gasoline inventories fell by 6.4 million, while distillate inventories fell by 1.8 million.
If the Energy Information Administration (EIA) estimates, expected Wednesday, reflect the API figures, U.S. gasoline inventories would have dropped for the third straight week to their lowest pre-Memorial Day levels since 2014.
“If that is confirmed with tomorrow’s EIA report, we could start seeing some easing recessionary concerns,” said OANDA’s Moya.
U.S. peak summer travel begins on Memorial Day, May 29.
Market concerns about U.S. debt ceiling talks dampened oil prices. Tuesday’s debt ceiling talks failed to raise the government’s $31.4 trillion borrowing cap before the deadline.
