Oil slid after a surprise increase in American stockpiles, while Saudi Arabia cut prices for its crude as US President Donald Trump urges OPEC to do more to help make gasoline cheaper.
Futures dropped as much as 1.7% in New York following a government report showing US crude inventories climbed 1.25 million barrels last week as imports rose and exports fell. Analysts surveyed by Bloomberg had been expecting a median 5 million-barrel decrease as supplies typically decline this time of year amid strong demand from refiners.
At the same time, Saudi Arabian Oil Co. lowered August pricing for most crude grades in Asia and Europe and cut them all in the US a day after Trump called on OPEC to "REDUCE PRICING NOW!" in a tweet on Wednesday.
The market was expecting "higher exports and lower imports, but we got the reverse," said Rob Thummel, managing director at Tortoise, which handles $16 billion in energy-related assets.
Crude hit a three-year high of $75.27 on Tuesday as the outlook for less supplies from Iran, Libya and Venezuela overshadows a pledge by OPEC and its allies to boost output by 1 million barrels a day. Inventories at the key US storage hub in Cushing, Oklahoma, have declined for the seventh straight week.
West Texas Intermediate crude for August delivery fell 63 cents to $73.51 a barrel at 11:37 am on the New York Mercantile Exchange. There was no settlement on Wednesday due to the US holiday.
Brent for September settlement slid 4 cents to $78.20 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $6.84 premium to WTI for the same month.
In addition to cutting prices, Saudi Arabia told OPEC it pumped about 10.5 million barrels of crude a day last month as the kingdom sought to cap rallying prices by ramping up output, according to people familiar with the matter. The June figure would represent an increase of about 500 000 barrels a day from May.
In the US, crude imports rose to the highest level since February 2017, with crude coming from Canada at the highest on record. Meanwhile, crude exports fell by the most since mid-May.
The EIA also reported refinery utilisation ticked lower for the first time since early May. Gasoline supplies declined, while distillate stockpiles rose.
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