Crude oil futures slipped in mid-morning trade in Asia Wednesday after the International Energy Agency said the global oil markets are "adequately supplied" and US crude inventories climbed.
At 10:32 am Singapore time (0232 GMT), ICE June Brent crude futures were down 40 cents/b (0.54%) from Tuesday's settle at $74.11/b, while the NYMEX June light sweet crude contract was 39 cents/b (0.59%) lower at $65.91/b.
Citing increased production from the US by 1.6 million b/d this year, the IEA added that easing infrastructure bottlenecks in the US would help oil exports keep pace with production.
The IEA, however, noted that further tightening of Iran sanctions by the US would restrict Iran's ability to export crude oil. Iranian oil minister Bijan Zanganeh on Tuesday said the US sanctions crackdown will backfire in the form of a supply squeeze, given the "fragile" state of the market.
"The oil market is very unpredictable and under these fragile conditions there is no assurance that oil will be produced as much as the market needs," Zanganeh said in a speech to parliament broadcast on state radio.
"The Americans and their allies, by politicizing oil and using it as a weapon, have made a big mistake," Zanganeh added.
Iranian oil exports averaged more than 1.7 million b/d in March, according to S&P Global Platts cFlowtrade flow data and shipping sources.
Prices were further capped after industry sources noted a build of 6.9 million barrels in US crude stocks reported by the American Petroleum Institute.
More definitive weekly US inventory figures are due for release by the US Energy Information Administration later Wednesday.
"If the US is fully committed to its hawkish Iranian pledge, prompt prices will reprice higher as Saudi Arabia appears tentative about increasing supplies ... So to what degree oil markets tighten, and how high oil price goes, will now mostly be dependent on the supply response from the OPEC+ group," SPI Asset Management's managing partner and head of trading Stephen Innes said.
As of 0232 GMT, the US Dollar Index was up 0.09% at 97.340. - Source: Platts-