Oil prices fell on Wednesday after rising in the previous three sessions but losses were limited on the view that global supply tightness will continue as there is limited room for major producers such as Saudi Arabia to boost production. U.S. West Texas Intermediate (WTI) crude futures slid 44 cents, or 0.4%, to $111.32 a barrel, giving up earlier gains. Brent crude futures for August declined 61 cents, or 0.5%, to $117.37 a barrel, also turning an earlier gain.
Both Brent and WTI raised more than 2% on Tuesday as concerns over tight global supply outweighed fears that demand may slow in a potential future recession. The agreement by the Group of Seven economic powers to explore ways to cap the price of Russian oil also supported the market sentiment.
Saudi Arabia and the UAE have been seen as the only two members of the Organization of the Petroleum Exporting Countries (OPEC) with spare capacity to make up for lost Russian supply and weak output from other member nations. But UAE Energy Minister Suhail al-Mazrouei said on Monday the emirate was producing near the maximum capacity of its quota of 3.168 million barrels per day under the agreement with OPEC and its allies, together called OPEC+.
Inventory data in the U.S. did provide some sense of boosting fuel supply though. Stockpiles of gasoline for the week ending June 24 rose by 2.9 million barrels and distillate fuel supplies increased by 2.6 million barrels, according to market sources citing American Petroleum Institute figures on Tuesday. However, crude inventories fell by 3.8 million barrels.