Oil prices sank about 1 percent on Wednesday after government data showed US crude stocks unexpectedly rose last week as exports slowed due to a chemical spill along at the nation’s busiest energy port.
Brent crude futures fell 51 cents, or 0.8 percent, to $67.46 a barrel by 11:59 a.m. EST (1559 GMT). US crude futures dropped 83 cents, or 1.4 percent, to $59.11 a barrel.
US crude inventories rose last week by 2.8 million barrels, compared with analysts’ expectations for a decrease of 1.2 million barrels, the US Energy Information Administration said.
“The report was bearish relative to expectations, as crude inventories rose due, in part, to a steep drop in exports week-on-week,” said John Kilduff, a partner at Again Capital LLC in New York. “The rise in crude oil inventories at Cushing was another bearish data point.”
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 541,000 barrels and exports fell 506,000 barrels per day, the EIA said.
A petrochemical tank fire and chemical spill last week along the Houston Ship Channel hampered crude shipments for several days.
“The tank fire caused a lot of problems in the ship channel with benzene and other chemicals slipping into the water,” said Donald Morton, who runs an energy trading desk at investment banking firm H.J. Sims & Co. “It was a very short-term situation that will get better quickly and already has started getting better.”
The US Coast Guard on Monday reopened portions of the Houston Ship Channel with restrictions on waterways affected by chemical leak.
Further disruptions to Venezuelan exports helped to limit losses.
On top of US sanctions in January which banned US refiners from buying Venezuelan oil, the OPEC member’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a massive power blackout on Monday, the second in a month.[nL1N21E0FV]
Oil prices have jumped more than 25 percent this year, supported by supply curbs by the Organization of the Petroleum Exporting Countries and other major producers, along with US sanctions on exports from Venezuela and Iran.
Bullish supply and demand signals from the United States were also supportive.
Crude flows from two key shale basins to the Cushing, Oklahoma delivery point for US crude futures slowed in March due to winter production outages, dealers said.
Hedge funds and other money managers have increased bets that demand for oil will be sustained, even as the market rallied last week.