Sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant

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  • Transneft restarts oil flows via Druzhba – RIA
  • U.S. crude inventories up more than 5 million barrels
  • US Inflation Data Weaker Than Expected

NEW YORK, Aug 10 (Reuters) – Oil prices fell on Wednesday as flows on the Druzhba pipeline between Russia and Europe resumed and after U.S. crude inventories rose far more than expected.

Brent crude futures were down $1.66, or 1.7%, at $94.65 a barrel as of 11:07 a.m. EST (4:07 p.m. GMT). U.S. West Texas Intermediate crude futures were down $1.70, or 1.9%, at $88.80.

Russia’s state pipeline monopoly Transneft (TRNF_p.MM) has restarted oil flows through the southern section of the Druzhba pipeline, RIA news agency reported on Wednesday, citing Igor Dyomin, an aide to the chairman of Transneft.

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Ukraine has suspended Russian pipeline flows to parts of central Europe since the start of this month because Western sanctions have prevented it from collecting transit fees from Moscow, Transneft said on Tuesday. Read more

Demand fears also weighed on prices, analysts said.

“Fears of recession-induced demand destruction are currently the main driver of prices and the main reason why Brent is trading below $100 a barrel,” said Stephen Brennock, an analyst at PVM.

U.S. crude oil inventories, meanwhile, rose 5.5 million barrels for the week ended Aug. 5, according to the U.S. Energy Information Administration, more than the forecast increase of 73,000 barrels. Refining activity also increased, as well as oil production. Analysts polled by Reuters had forecast crude inventories to rise by around 100,000 barrels.

Although worries about a possible global recession have weighed on oil futures, U.S. oil refiners and pipeline operators expect energy consumption to be strong for the second half of 2022, a showed a Reuters review of corporate earnings calls. Read more

Overall, gasoline supplied increased in the most recent week to 9.1 million bpd, but in the past four weeks that figure is 8.9 million bpd, down from 6% compared to the period of the previous year.

“The gasoline number was decent for this time of year,” said John Kilduff, partner at Again Capital in New York. “It’s good to see a level close to normal here.”

Consumer prices in the United States remained unchanged in July due to a sharp drop in the cost of gasoline, offering the first notable sign of relief for Americans who have seen inflation climb over the past two years. . Read more

Economists polled by Reuters had forecast a 0.2% rise in the monthly CPI in July.

But the Fed has indicated that several monthly declines in CPI growth will be needed before unwinding the increasingly aggressive monetary policy tightening it has imposed to rein in inflation which is currently at four-decade highs. . Read more

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Reporting by Rowena Edwards Additional reporting by Emily Chow in Kuala Lumpur Editing by Mark Potter, Kirsten Donovan, Alexander Smith and David Gregorio

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Thomson Reuters

David Gaffen oversees a North American oil and gas writing and reporting team; he previously worked at The Wall Street Journal and TheStreet.com