Oil prices weaken after API's buildup report

March 6 (UPI) -- Crude oil prices fell early Wednesday following a report Tuesday detailing a larger-than-expected buildup by the American Petroleum Institute, as traders await official data later Wednesday from the U.S. Energy Information Administration.

West Texas Intermediate crude future prices fell 1 percent to $56 per barrel as of 8:12 a.m. EST while Brent prices fell 0.3 percent to $65.67 per barrel.

WTI prices changed little Tuesday after closing at $56.59 per barrel on Monday, up from $55.80 per barrel on Friday. WTI prices reached their highest level so far this year on Feb. 22 at $57.26 per barrel, which compares with 2018's high of over $76 per barrel, reached on October 3.

"WTI crude oil erased most of its recent gains as the American Petroleum Institute reported a large build in private stockpiles at 7.29 million barrels for the week ending March 1, coming in way over analyst expectations of a 0.38 million increase," FxDailyReport analyst Katrina Ang wrote Wednesday.

The Energy Information Administration, or EIA, will release official United States crude oil inventory data later Wednesday. The EIA reports can vary greatly from API reports, which are available only to subscribers.

Separately, Amir Hekmati, an oil futures trader at TradeFlow, told UPI that crude futures seem to be trading in a range as traders balance supply and demand issues. Hekmati said he has seen hedge funds buying Brent futures in most recent weeks.

"WTI is facing a strong dollar, and increasing levels of U.S. production on one hand, and OPEC cuts, and supply uncertainty on the other," Hekmati said.

"The price action has confirmed this sentiment with WTI trading in a range for most of the week. Trade data however, shows hedge funds being net buyers of Brent crude futures, and options in 11 of the past 12 weeks per CFTC Data," he added.

"I expect any significant selloff in WTI to be bought between now and the June OPEC meeting," Hekmati said.