Oil dips in Asia after API reports build in US stocks

Oil prices at both the sides of the Atlantic retreated in Asia after the American Petroleum Institute (API) reported a surprise build in the US stocks last week.

At the time of writing, Brent futures were down 48 cents or 1% at $48/barrel. WTI futures were down 35 cents or 0.75% at $46.44/barrel.

The API data released post US market hours on Tuesday showed oil inventories rose by 2.2 million barrels in the week to July 8 to 523.1 million, compared with analysts' expectations for a decrease of 3 million barrels. The surprise build in inventories pushed prices moderately lower in Asia.

Oil prices spiked 5% on Tuesday from two-month lows; the largest single day gain since April after the Organization of the Petroleum Exporting Countries (OPEC) revealed forecasts for higher oil demand and lower production next year.

The oversold oil markets focused on OPEC’s bullish comments and jumped higher. The risk-on sentiment in the equity markets also supported the recovery in oil prices from two-month lows.