Oil Prices Demure on Kazakhstan Issue

Petroleum prices lost about 1% on Wednesday after Kazakhstan struck a defiant tone about its rising oil output, erasing earlier gains on the back of U.S. sanctions against Iran, falling U.S. crude stocks and President Donald Trump softening his tone on China.

Brent crude futures lost 61 cents, or 0.9%, at $66.83 U.S. per barrel, while U.S. West Texas Intermediate crude lost 56 cents, or 0.88%, to $63.11.

Sending bearish signals, Kazakhstan’s new Energy Minister told Reuters that his country will prioritize national interests over those of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) when deciding its oil output levels.

Kazakhstan has angered other OPEC+ members by producing more than its allotted quota.

Providing a floor to prices, the U.S. issued new sanctions targeting an Iranian shipping magnate whose network handles Iranian liquefied petroleum gas and crude oil worth hundreds of millions of dollars.

Further price support came from U.S. crude oil inventories that fell by about 4.6 million barrels last week while gasoline stocks declined by 2.2 million barrels and distillate inventories dropped by 1.6 million barrels, market sources said, citing American Petroleum Institute data.

U.S. government data on oil stockpiles was due late Wednesday morning on Wednesday. U.S. crude oil stocks were expected to have declined by 800,000 barrels last week, according to a Reuters poll.