Oil prices eased on Thursday after rallying to multi-year highs, but remained supported as fears of more confrontations in the Middle East offset an unexpected buildup in U.S. crude inventories.
New York-traded West Texas Intermediate crude futures were down 13 cents or 0.19% to $66.69 a barrel by 4:47 AM ET (08:47 AM GMT). The U.S. benchmark rose 2.1% in the previous session to a level last seen in late 2014.
Brent crude futures, the benchmark for oil prices outside the U.S., shed 22 cents, or roughly 0.32%, to $71.85 a barrel. Brent climbed 1.27% on Wednesday to hit its highest level since late 2014.
The release of data on Wednesday showing rises in U.S. inventories and production weighed on prices.
Inventories of U.S. crude rose by 3.306 million barrels for the week ended April 6, confounding expectations for a modest decline of 600,000 barrels.
Meanwhile, U.S. crude oil production last week hit a fresh record of 10.53 million barrels per day (bpd), up by a quarter since mid-2016.
But concerns over Middle East tensions continued to grip markets.
After a Russian diplomat said his country’s forces would shoot down U.S. missiles launched at Syria, U.S. President Donald Trump warned Russia to “get ready” for imminent military action in response to an alleged chemical attack over the weekend.
Trump’s comments raised the prospect of direct military conflict between the U.S. and Russia in Syria, escalating tensions in the Middle East.
While Syria isn’t a major oil producer, the wider Middle East is the world’s most important crude exporter and tension in the region raises the prospect of supply disruptions, analysts said.
Adding to jitters, Saudi Arabia said its air defense forces intercepted at least three ballistic missiles fired at Saudi cities by Yemen’s Houthis.
There are also concerns that the U.S. could renew sanctions against Iran, a major Middle East oil producer.
The monthly oil report from the Organization of the Petroleum Exporting Countries was scheduled for release on Thursday, followed by a report from the International Energy Agency on Friday.