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Brent crude futures fell 74 cents, or 0.7%, to $94.62 a barrel
by 1201 GMT, while U.S. West Texas Intermediate (WTI) crude
futures fell 76 cents, or 0.8%, to $88.15 a barrel. The
benchmarks fell around 3% on Tuesday.
U.S. crude oil inventories rose by about 5.6 million barrels for
the week ended Nov. 4, according to market sources citing
American Petroleum Institute figures, while seven analysts
polled by Reuters estimated on average that crude inventories
would rise by about 1.4 million barrels.
Last week, the market had latched onto hopes that China might be
moving toward relaxing COVID-19 restrictions but over the
weekend health officials said they would stick to their
"dynamic-clearing" approach to new infections.
COVID-19 cases in Guangzhou and other Chinese cities have
surged, with millions of residents of the global manufacturing
hub being required to have COVID-19 tests on Wednesday.
"With that (China reopening) narrative getting pushed back,
coupled with a considerable build on U.S. inventory data,
implying dimming U.S. demand, the recessionary crews are back
out in full force this morning in Asia," Stephen Innes, managing
partner at SPI Asset Management, said in a note.
In another bearish sign, API data showed gasoline inventories
rose by about 2.6 million barrels, against analysts' forecasts
for a 1.1 million drawdown.
The market will be looking out for official U.S. inventory data
from the Energy Information Administration due at 10:30 a.m. EST
(1530 GMT) for a further view on demand in the world's biggest
economy.
Meanwhile, supply concerns remain.
"In addition to ongoing OPEC+ supply cuts, Russian oil supply
should fall as the EU ban on Russian crude and refined products
comes into effect," ING commodities strategists said in a note.
The EU will ban Russian crude imports by Dec. 5 and Russian oil
products by Feb. 5, in retaliation to Russia's invasion of
Ukraine. Russia calls its actions in Ukraine a "special
operation".
(Additional reporting by Sonali Paul in Melbourne and Isabel Kua
in Singapore; Editing by Himani Sarkar, Christopher Cushing and
Louise Heavens)
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