LONDON – Oil prices fell Wednesday morning on the back of bearish data showing a rise in U.S. crude supplies and a weaker global demand outlook.
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Brent crude, the global benchmark, was down 0.93%, at $61.61 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.95%, at $55.18 a barrel.
Late Tuesday, the American Petroleum Institute, an industry group, released data showing a 6.5 million-barrel increase in U.S. crude stockpiles and a buildup of refined products like gasoline for the week ended Nov. 10.
The U.S. Energy Information Administration is expected to release official inventory data Wednesday afternoon.
"If the EIA data confirms the API data it's going to be difficult to have a strong rebound," said Olivier Jakob, head of Swiss oil consultancy Petromatrix.
Without "significant" stock drawdowns in the U.S., its unlikely Brent and WTI will stay above $60 a barrel and $55 a barrel, respectively, Mr. Jakob said.
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Oil prices have gained roughly 20% since early September and have been hovering around multiyear highs, boosted by geopolitical turmoil in the Middle East and efforts by the Organization of the Petroleum Exporting Countries to curb global crude output.
OPEC and some major producers outside the cartel, including Russia, first agreed late last year to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices.
OPEC and other deal participants are set to convene in nearly two weeks in Vienna to assess the progress of the deal and debate a possible extension through the end of next year after the deal expires in March.
Also on Tuesday, the International Energy Agency cut its global oil demand forecast for this year and next by 100,000 barrels a day. The agency now expects demand to grow by 1.5 million barrels a day this year and 1.3 million barrels a day next year.
"The logic behind this downgrade is the negative impact stemming from rising oil prices on demand prospects," according to Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd. "Higher oil prices are therefore no panacea for oil producers and may undermine the continuing fight against the supply imbalance," Mr. Brennock said in a note Wednesday.
The IEA's findings stand in contrast to that of OPEC, which earlier this week raised its demand forecasts for global oil demand for 2017 and 2018, saying the market was becoming increasingly rebalanced and stable.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 1.77%, at $1.76 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $551.00 a metric ton, up 0.09% from the previous settlement.
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(END) Dow Jones Newswires
November 15, 2017 05:52 ET (10:52 GMT)