Brent crude futures settled at $63.46 a barrel, up 7 cents. They clocked a weekly rise of about 1.7%. U.S. West Texas Intermediate crude settled at $56.20 a barrel, rising 18 cents. It gained about 1.2% on the week. U.S. economic growth slowed less than expected in the second quarter with a boom in consumer spending, strengthening the outlook for oil consumption.
NEW YORK: Oil prices slipped on Wednesday as the European Union seeks to circumvent U.S. trade sanctions against Iran, and on weaker U.S. gasoline prices.
Brent futures fell 36 cents, or 0.6 percent, to settle at $61.14 a barrel, while the most active U.S. West Texas Intermediate (WTI) crude contract for March fell 39 cents, or 0.7 percent, to settle at $52.62.
France's foreign minister said he expected a European-backed system to facilitate non-dollar trade with Iran and bypass fresh U.S. curbs imposed after Washington quit a landmark nuclear deal, would be established in coming days.
Peter Cardillo, chief market economist at Spartan Capital Securities in New York said that EU announcement "knocked the wind out of oil prices."
Analysts also said falling U.S. gasoline prices and rising crude output in the United States were also pressuring the crude market.
"We are paying particular attention to weakening NYMEX crack spreads where an increasingly heavy gasoline market is providing a limiter on near term WTI gains," Jim Ritterbusch, president of Ritterbusch and Associates in Chicago, said in a report.
The crack, or spread, between U.S. gasoline futures and WTI crude
Both U.S. crude and product futures extended their losses in post-settlement trade after an industry report showed that U.S. crude stockpiles rose sharply last week, while gasoline and distillate inventories built. [API/S]
Data from the American Petroleum Institute showed crude inventories increased 6.6 million barrels, compared with analysts' expectations for a decrease of 42,000 barrels.
Gasoline stocks rose by 3.6 million barrels, compared with analysts' expectations in a Reuters poll for a 2.7 million-barrel gain. Distillate fuels stockpiles gained by 2.6 million barrels, compared with expectations for a 229,000-barrel drop, the API data showed.
If the weekly product builds are confirmed by government data on Thursday at 11 a.m. (1600 GMT), it would be the eighth rise in a row for gasoline, and the fifth straight build for both distillates and gasoline.
(For a graphic on U.S. oil production growth, click here https://tmsnrt.rs/2AZSnDc)
U.S. CONSIDERS VENEZUELA SANCTIONS
The Trump administration ratcheted up pressure on Venezuela's President Nicolas Maduro on Wednesday, announcing U.S. recognition of the country's opposition leader as interim president and signalling potential new sanctions against its vital oil sector.
Potential U.S. sanctions on Venezuela's crude oil exports, however, would hit U.S. refiners that are its biggest customers, as the OPEC nation would likely be forced to send more crude to China, India or other Asian countries, traders said.
The U.S. share of Venezuelan exports has fallen in recent years with more shipments going to Russia and China, largely through oil-for-debt repayment structures.
"It would make a tight market even tighter. If it happens, it would be an unambiguous headwind for (U.S.) refiners already struggling to find supplies," said Bob McNally, president of Rapidan Energy Group, an energy consultancy in Bethesda, Maryland. - Reuters
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