Crude oil prices fell in Asia on Wednesday despite U.S. industry data on oil inventories that showed solid draw downs in refined products and a better than expected manufacturing survey from HSBC (LONDON:HSBA) on China.
U.S. crude oil stocks rose by 5.2 million barrels last week, according to data from the American Petroleum Institute, while distillate supplies fell 18,000 barrels and gasoline inventories dipped 4.1 million barrels. The data is a guide to more closely watched igures for the same period due from the U.S. Department of Energy later Wednesday.
Australia February building approvals fell 3.2% month-on-month, less than the 4.0% month-on-month fall expected after a 7.9% gain in January.
In China, the March CFLP manufacturing and services PMI rose to 50.1, better than the dip to 49.7 expected and up from February's 49.9.
Overnight, crude oil futures plunged by more than 2% in afternoon trading hours, as the White House sent indications that negotiations with Iran on its nuclear program could extend beyond a deadline previously set for late Tuesday evening.
Intense fighting in Yemen, meanwhile, continued to weigh on energy prices. On Monday, Saudi Arabian-led airstrikes killed 29 people, including women and children. The attacks came as the Saudi Arabian navy imposed a blockade on a number of ports throughout the country.
Oil prices surged late last week amid concerns that the closure of a strategically located strait connecting the Red Sea with the Gulf of Aden, could limit exports out of the area. The concerns eased after analysts from Goldman Sachs (NYSE:NYSE:NYSE:GS) told investors that the critical oil chokepoint could still be reached through an alternative route if the Bab el-Mandeb strait is shut down.
Oil prices are sensitive to any risky geopolitical news involving Saudi Arabia, the world's largest exporter of oil.
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