Oil prices drop as US crude inventories show an increase

BEIJING – Oil prices fell slightly on Wednesday morning after sources citing American Petroleum Institute figures showed an increase in US crude inventories.

Brent futures dropped USD 1.15, or 1.11%, to USD 102.27 a barrel by 0108 GMT, while US West Texas Intermediate crude dropped USD 1.54, or 1.6%, to USD 94.67.

US crude stocks rose by 6.56 million barrels in the week ended March 13, market sources said, citing API figures on Tuesday.

A Reuters poll showed that US crude oil stockpiles were expected to have risen by about 380,000 barrels in the week to March 13.

In terms of supply, Iraq’s oil minister said on Tuesday that the Iraqi government and the Kurdistan Regional Government reached an agreement to resume oil exports to Turkey’s Ceyhan energy hub starting on Wednesday.

Oil flow from Ceyhan port is expected to start at 10 a.m. local time (0700 GMT) on Wednesday.

Libya’s National Oil Corporation said early on Wednesday that flows from the Sharara oilfield were gradually redirected through alternative pipelines after a fire broke out, adding that production remains on tap and there were no casualties.

Iran’s security chief Ali Larijani was killed by Israel, Tehran confirmed on Tuesday, the most senior figure targeted since the US-Israeli war’s first day, while a senior Iranian official said Iran’s new supreme leader rejected de-escalation offers conveyed by intermediary countries.

The United States military said Tuesday it had targeted sites along Iran’s coastline near the Strait of Hormuz because Iranian anti-ship missiles posed a risk to international shipping there.

Iranian power broker Larijani’s death and the US military’s strikes on Iranian coastal positions near the Strait of Hormuz have raised hopes that the conflict could end sooner, said Mingyu Gao, chief researcher for energy and chemicals at China Futures.

(Reporting by Sam Li and Lewis Jackson; Editing by Stephen Coates)