LONDON: Oil prices fell on Wednesday after a rise in US crude inventories, while an intensifying crisis in Venezuela and tightened US sanctions on Iran added further uncertainty to markets.
Brent crude oil futures were at $71.74 per barrel at 08:55 GMT, down 32 cents or 0.44 per cent from their last close.
US crude futures were down 49 cents or 0.77 per cent at $63.42 per barrel.
Trading was thin as May 1 is a holiday in many markets.
US crude stocks rose by 6.8 million barrels to 466.4 million barrels in the week to April 26, the American Petroleum Institute (API), an industry group, said on Tuesday.
“US oil stocks are swelling due to an upswing in crude inventories … the glut alarm bells are ringing louder in the US,” PVM Oil Associates strategist Stephen Brennock said.
Markets also keenly watched oil producer Venezuela, where opposition leader Juan Guaido called for an uprising against President Nicolas Maduro. Many observers fear this could lead to escalating violence and further disruptions to crude supply.
Oil markets have already tightened this year due to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) as well as US sanctions on Venezuela and Iran.
Washington is set to revoke waivers for select countries to import Iranian oil on Wednesday and says it aims to drive down Iran’s crude exports to zero.
“The Iran sanctions come on top of already fragile supplies and raise concerns about tightening markets,” said Norbert Ruecker, head of research at Swiss bank Julius Baer.
OPEC meets in June to discuss production policy. While Washington has demanded the group increase output to make up for the shortfall from Iran, OPEC’S de facto leader Saudi Arabia said on Tuesday it had no immediate plan to do so.