Oil edges higher but surprise US stock build weighs

Oil prices edged higher on Wednesday amid continued outages in the United States and a weaker dollar, but a surprise build in US inventories last week capped gains.

Brent crude futures gained $0.52, or 0.8%, to $65.89 a barrel at 1109 GMT, after hitting a session low of $64.80.

US West Texas Intermediate (WTI) crude futures were up $0.37, or 0.6%, at $62.04 a barrel, after trading as low as $60.97 earlier on Wednesday.

Crude stockpiles rose by one million barrels in the week to February 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters’ poll.

The data, however, showed a larger-than-expected 4.5-million-barrel fall in distillate fuels. Official data is due later on Wednesday.

“This morning, we have seen the oil complex oscillate in between gains and losses, but it has recently firmed on the back of a weaker US dollar,” StoneX analyst Kevin Solomon said.

The dollar index against a basket of six major currencies was trading near a six-week low on Wednesday.

As crude is priced in dollars, a weaker greenback makes the commodity cheaper for holders of other currencies.

Brent may rise into a range of $66.45-$66.97 per barrel again, as suggested by its wave pattern and a projection analysis, said Reuters’ technical analyst Wang Tao.

Traffic at the Houston ship channel was slowly coming back to normal but terminals were still facing several issues due to last week’s freezing weather in Texas.

The price retreat is being seen as a pause following a rally of more than 26% to 13-month highs in both Brent and WTI since the start of the year.

Prices have jumped due to the US supply disruption and supply discipline by the Organisation of the Petroleum Exporting Countries and allies, together called OPEC+, led by an extra one-million-bpd cut by Saudi Arabia.