Oil fell on Thursday after US government data showed an unexpected build in crude oil stockpiles.
US crude futures fell $1.20 to settle at $72.94 a barrel, retreating from Tuesday’s three-and-half-year high of over $75.
Brent crude futures lost 85 cents to settle at $77.39 a barrel.
US crude stockpiles rose 1.3 million barrels last week, according to US Energy Information Administration data.
Analysts had expected a 3.5 million-barrel draw.
‘Because it’s driving season, you expect a lot of crude to go through refineries right now – so that’s why we were looking for a draw,’ said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
On Thursday, The Wall Street Journal reported that public listing preparations of state-run Saudi Aramco have stalled.
That may reduce the pressure on Saudi Arabia to keep oil prices high, said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
Saudi Arabia has wanted to sell shares in Aramco to bring in foreign investment to diversify its economy but legal concerns about listing in places like London or New York have presented complications.
Inventories at Cushing, Oklahoma, the delivery point for US crude futures, fell to their lowest level since December 2014.
Flows into Cushing dropped following an outage at the 360,000 barrel per day (bpd) Syncrude facility in Alberta, which is expected to persist through July.
‘With those continued drawdowns at Cushing, we were approaching a situation where you could soon start to consider us nearing a shortage,’ Kilduff said.
The inventory report also showed an increase in imports, which ‘provided some relief…and showed that even with the Syncrude situation, all is not lost,’ Kilduff said.
Oil prices have been rocked by recent comments from President Donald Trump. On Wednesday, he accused the Organization of the Petroleum Exporting Countries of driving up fuel prices.
OPEC, together with a group of non-OPEC producers led by Russia, reduced output in 2017 to prop up the market.
Last month, the group agreed to lift production by about 1 million bpd to offset losses from Venezuela and Iran.
Prices have risen as a result of Washington’s plans to reimpose sanctions against Iran, OPEC’s number three producer, analysts said.
On Wednesday, an Iranian Revolutionary Guards commander said Tehran might block oil shipments through the Strait of Hormuz.
A blockade of the strait, through which roughly 30 per cent of all seaborne oil travels, would have ‘dramatic consequences for global oil supply and an impact on prices that is almost impossible to put into figures,’ Commerzbank said in a note.
The US Navy stands ready to ensure freedom of navigation and free flow of commerce, a spokesman for the US military’s Central Command said.