Crude futures in Asia maintained the late Tuesday skid in prices after an industry group said U.S. oil and gasoline stockpiles rose again last week.
The American Petroleum Institute reported crude inventories rose 2.8 million barrels last week while gasoline supplies increased by 1.8 million. That as traders and analysts have expected Wednesday's readings from the U.S. government to show declining inventories for both oil and gasoline.
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Numbers between the API and the Energy Information Administration don't always match, but the inventory increases stated in the API's report a week ago did get affirmed by the EIA a day later, sending oil prices slumping 5% last Wednesday.
"The prior divergence sets up the possibility that we could see a reversal" in prices after Wednesday's EIA report, said Tim Evans, energy futures specialist at Citi.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded were recently down 1% at $46 a barrel in the Globex electronic session while August Brent crude on London's ICE Futures exchange fell 0.8% to $48.32. July Nymex reformulated gasoline blendstock shed 0.8% to $1.4877 a gallon and diesel eased 0.4% to $1.4421, but ICE gasoil rose 0.5% to $428.75 a metric ton.
The post-API price declines followed overnight gains despite rising production in May by members of the Organization of the Petroleum Exporting Countries. It said Tuesday that output rose 1% from April amid gains in Iraq, Nigeria and Libya--the latter two are exempt for the current production-cut deal.
The OPEC report also showed that five months into the production cuts, crude supplies in developed nations were still 251 million above OPEC's target. "Market sentiment is that the cuts have proven to be ineffective," said Barnabas Gan, an OCBC economist. He added U.S. production should remain robust as long as oil stays above $45.
Not all are bearish. BP PLC said its latest research report that supply risks loom as reduced "investment spending on new energy projects over the past two years has not yet been fully felt." Also, OPEC forecasts daily oil-demand growth in China and India of 340,000 and 120,000 barrels, respectively, this year. That compares with the 1.8 million barrels a day the production-cut agreement calls to remain in the ground.
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(END) Dow Jones Newswires
June 13, 2017 23:19 ET (03:19 GMT)