Oil falls as investors grow wary of OPEC commitment to supply deal


Oil prices edged lower on Wednesday as the market took a breather on expectations OPEC may raise supplies as early as June, although geopolitical risks kept a floor under the market.

He declared, "It's time for this president to stand up to OPEC; he's palling around with Saudi Arabia and the United Arab Emirates and all these other oil-rich countries.[Trump] should buck his oil industry buddies".

The U.S. oil rig count rose by 15 to 859 in the week to May 25, the highest level since March 2015, General Electric Co's Baker Hughes energy services firm said.

The price drop of both WTI and Brent crude oil this week is being attributed to sanctions on Iran and increased sanctions on Venezuela following last weekend's re-election of Nicolas Maduro.

Global inventories have been broadly falling. Renewed U.S. sanctions following the cancellation of the Iran nuclear arms deal may also remove supply from the market.

The price of crude is the main factor weighting the markets today. "If sanctions are imposed on Iran, most OPEC producers would like to pump more oil, especially given higher prices", the market strategist of CMC Markets, Michael McCarthy said. "But if Iran and Venezuela will reduce the supply of likely oil will need more that the price of oil rose even more", - he said "Interfax" on the sidelines of the St. Petersburg worldwide economic forum (SPIEF-2018).

But the sources said that the quick decline in global oil inventories and worries about the impact on oil supplies after the USA decision to withdraw from the worldwide nuclear deal with Iran, as well as Venezuela's collapsing oil output, were behind the change in OPEC's thinking.

US West Texas Intermediate (WTI) crude futures eased 25c, or 0.4%, to $71.95 a barrel, having climbed on Tuesday to $72.83 a barrel, the highest since November 2014. Traders also pointed to deals on the U.S. swap data repository as indicative of an heightened consumer activity.

Inventories of gasoline rose by 1.9 million barrels in the same week, just ahead of the Memorial Day holiday in the United States which typically marks the start of the summer driving season.

The API reported a build in gasoline inventories for week ending May 18 in the amount of 980,000 barrels-in contrast to the 1.388-million-barrel draw that analysts had expected. Crude oil futures as far as five years forward have been surging in price in recent weeks.

Oil later recovered some of its losses yesterday, to about $79.41...