LONDON – Oil prices fell Wednesday as investors weighed U.S. data showing crude inventories declined last week while stocks of refined products mounted.
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Brent crude, the global benchmark, was down 0.48% at $51.62 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.38% at $47.65 a barrel.
The American Petroleum Institute, an industry group, said late Tuesday that U.S. crude inventories declined by 3.6 million barrels during the week ended Aug. 18, while gasoline and distillate stocks rose by 1.4 million barrels and 2 million barrels respectively.
Official data for last week from the U.S. Energy Information Administration is set to be released later today.
"It's going to be hard to beat the stock withdrawals from last week," said Nitesh Shah, an economist and commodity strategist at asset manager ETF Securities.
EIA data from last week showed crude stocks had fallen by nearly 9 million barrels during the week ended Aug. 11, the ninth reduction in 10 weeks.
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Mr. Shah said he expected drawdowns of crude stocks to slow as the busy U.S. summer driving season comes to an end. He also noted that a higher inventory level of refined products is a sign that "end demand is lacking."
Meanwhile, confusion surrounding the status of Libya's largest oil field, Sharara, also contributed to price uncertainty, according to analysts at Commerzbank. Sharara was shut down this past weekend after a local tribe closed a pipeline in a dispute over jobs. The market has subsequently responded to conflicting reports about whether the oil field is set to reopen.
"Yesterday's flood of news reports makes it clear that the situation in Libya is still chaotic and that conditions in the country are still far from normal," Commerzbank analysts wrote in a note Wednesday. "This also makes it unlikely that Libya will be included in the OPEC cut agreement anytime soon," the analysts noted.
Libya was exempt from the Organization of the Petroleum Exporting Countries' agreement to curb crude output because its oil industry had been damaged by civil strife. But an expected surge in production in the North African country this summer has raised the question of whether the cartel should mandate Libya to cap production going forward.
OPEC and 10 producers outside the cartel, including Russia, first agreed late last year to cap production at around 1.8 million barrels a day lower than peak Oct. 16 levels, with the aim of reining in the global oil glut and sending prices higher. But the deal, which was extended in May through March 2018, has failed to have a significant impact on prices.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.52%, at $1.4937 a gallon. ICE gasoil changed hands at $469.50 a metric ton, down 0.90% from the previous settlement.
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(END) Dow Jones Newswires
August 23, 2017 06:13 ET (10:13 GMT)