Oil falls as swelling US supply counters Middle East and hurricane risks

Oil prices fell on Wednesday after U.S. data showed rising crude inventories, but losses were limited by the risk of Iranian supply disruptions caused by the Middle East conflict and Hurricane Milton in the U.S, Reuters reported.

Brent crude futures settled at $76.58 a barrel, falling 60 cents, or 0.8%. U.S. West Texas Intermediate (WTI) futures settled down 33 cents or 0.5%, at $73.24 a barrel.

Crude inventories jumped by 5.8 million barrels to 422.7 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 2 million-barrel rise.

The build was smaller than estimated on Tuesday by trade group American Petroleum Institute, which also limited declines in oil prices, said Bob Yawger, director of oil futures at Mizuho in New York.

Larger-than-expected drawdowns in gasoline and distillates also helped soften the impact to prices, Yawger said.

“There’s a bullish element in the gasoline number, which might have been a rebound from the hurricane,” said Yawger, referring to Hurricane Helene, which struck the U.S. late last month.

The country is bracing for a second major storm, Hurricane Milton, which spawned tornadoes and lashing rain hours ahead of its expected landfall in Florida on Wednesday. The storm has already driven up demand for gasoline in the state, with about a quarter of fuel stations selling out of supplies, which has helped support crude prices.

China said on Tuesday it was “fully confident” of achieving its full-year growth target but refrained from introducing stronger fiscal steps, disappointing investors who had banked on more support for the economy.

Investors have worried about slow growth dampening fuel demand in China, the world’s largest crude importer.

Weak demand continues to underpin the fundamental outlook. The U.S. Energy Information Administration (EIA) on Tuesday downgraded its demand forecast for 2025 on weakening economic activity in China and North America.