Inventory build-up sends oil prices down

March 27 (UPI) -- Oil prices fell Wednesday morning, a day after the American Petroleum Institute reported an inventory build-up. The market is awaiting possible confirmation of the API-reported inventory build-up today by the Energy Information Administration.

West Texas Intermediate crude futures oil fell 0.6 percent to $59.58 per barrel as of 7:53 a.m. EST, while Brent crude oil fell 0.2 percent to $67.31 per barrel.

WTI had gained Tuesday for the first day in four, yet it closed short of its $60.23 peak for 2019, which it reached on Wednesday. Brent rose Monday for a second day to $67.43 per barrel, short of the year-to-date high of $68.27 per barrel on Wednesday.

"The API reported a 1.9 million barrel build during the week-ending March 22. Traders were looking for a draw of 1.2 million barrels," wrote James Hyerczyk in a report.

"The API also reportedly showed stockpile declines of 3.5 million barrels for gasoline and 4.3 million barrels for distillates. Traders were looking for inventory declines of 3.6 million barrels for gasoline and 800,000 barrels for distillates," he added.

The EIA will release inventory data later in the day.

Hyerczyk said future direction would be greatly influenced by any resolution in the United States and China trade dispute.

Separately, Amir Hekmati, oil futures spec trader at Trade Flow, sees oil prices likely trending higher ahead.

"Hedge funds have continued to be net buyers of crude oil futures and options, and the U.S. dollar has also weakened," he said.

"There are some demand fears, but OPEC is committed to cuts, and production in two major oil producing countries Iran, and Venezuela is falling," he added.

He said there is a strong possibility that "the renewed OPEC cuts will not be reversed in a future tight market as OPEC countries are under severe pressure to shore up budget deficits," and there are real risk of a spike later this year if supply problems occur.