Oil prices drop amid rising crude stockpiles

Oil prices dropped today on Wednesday in Asia after the American Petroleum Institute (API) reported that US crude stockpiles rose by 1.1 million barrels last week.

US Crude Oil WTI Futures fell 0.3%$ to $58.08 by 11:15 PM ET (03:15 GMT), while International Brent Oil Futures dropped 0.3% to $64.33.

The API said crude inventories were up by 1.1 million for the week ended Jan. 10.

For the forthcoming Energy Information Administration report, which is due later in the day, analysts are expecting a crude inventory decline of 750,000 barrels. Gasoline is expected to build by 4.0 million barrels while distillates are expected to grow by 650,000.

Meanwhile, reports that the US will likely keep existing tariffs on Chinese goods in place until after the presidential election in November were also cited as headwind for oil and other risk assets today.

Oil markets traded higher earlier this month after a US drone strike killed top Iranian general Qassem Soleimani in Baghdad on Jan. 3, sparking fears of an all-out US-Iran war.

However, both nations later appeared to have stepped back and expressed that they do not seek escalation of war. The sudden disappearance in Middle East premiums sent oil prices lower, while global equities recovered.