Oil prices fell more than 4% Wednesday, shortly after a 10:30 a.m. report from the U.S. Energy Information Administration showed domestic crude inventories rose by 3.3 million barrels in the past week. Consensus estimates were calling for a 3.1 million barrel draw this week.
At 513.2 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year, the EIA said Wednesday.
The bearish report represents the first crude inventory build in several weeks and lends credit to recent sentiment over U.S. shale production rising at a pace that could in part offset a production cut from the Organization of the Petroleum Exporting Countries.
Reports of tension among OPEC members may also be playing into lower oil prices over the past week. West Texas Intermediate light sweet crude futures were trading at just above $46 a barrel.
OPEC on May 25 agreed to extend a 1.2 million barrel per day production cut for nine months through March 2018. But OPEC members Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain all recently cut diplomatic and transport ties with Qatar, a small producer, after claiming the latter's policies support terrorism and extremism.
CNN reported late last month, however, that the entire spat with Qatar was sparked by a fake news report by Russian hackers. Stifel Financial analysts said Wednesday this information could bring about an amicable end to the issue if found to be true.
Moreover, nothing suggests Qatar will leave OPEC, and Qatar isn't a core oil producer, meaning their participation in the OPEC cut agreement isn't crucial, Stifel wrote in a Wednesday research note.
"Nevertheless, this adds an additional overhang," the analysts said, adding that any issues with the company's natural gas and liquefied natural gas production could impact major international producers like Royal Dutch Shell (RDS.A) , Exxon Mobil (XOM) - Get Report , Total (TOT) - Get Report and Occidental Petroleum (OXY) - Get Report .