Oil prices closed lower on Wednesday, after storage data showed that crude inventories fell by less than some traders expected last week.
Light, sweet crude for December delivery settled down 8 cents, or 0.1%, to $54.30 a barrel on the New York Mercantile Exchange, reversing gains after breaking above $55 earlier in the session. Brent, the global benchmark, lost 45 cents, or 0.7%, to $60.49 a barrel.
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The U.S. Energy Information Administration reported that crude stockpiles fell by 2.4 million barrels in the week ended Oct. 27. The decline exceeded expectations of traders and analysts surveyed by The Wall Street Journal, who forecast on average that stockpiles would drop by 1.2 million barrels.
However, the number fell short of the estimate from the American Petroleum Institute, which logged a 5.1-million-barrel drawdown in crude supplies on Tuesday. Oil pared gains following the EIA release.
"The API bar was pretty high," said Bob Yawger, head of the futures division at Mizuho Securities USA. "You're getting the corresponding pullback here now."
Oil prices have been buoyed in recent weeks as some speculate that the Organization of the Petroleum Exporting Countries will do more to bring global inventories back down to the five-year average.
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.
Saudi Arabia and Russia -- the world's largest crude producers -- have both indicated a willingness to extend the deal when it expires in March. OPEC is set to debate the issue at an official meeting in Vienna on Nov. 30.
"The market seems to be really optimistic about OPEC continuing with production curbs" through the end of 2018, said Nitesh Shah, commodity strategist at ETF Securities, adding that oil investors were also increasingly convinced that a "mopping up of excess inventories is taking place and is successful."
However, some remain skeptical that OPEC will announce an extension, or that it will stick to its planned cuts.
Tony Headrick, an analyst at CHS Hedging, believes that OPEC will wait beyond November to decide whether or not to alter the deal.
"There's still several months in front of when the agreement expires. That's too much time to fully understand what's going to happen during those few months," he said.
Seaborne oil exports from Saudi Arabia increased in October for the first time since June, according to ship-tracking firm Kpler. Saudi Arabia cut back on exports this summer in an attempt to further push the oil market back into balance.
Meanwhile, U.S. crude exports climbed to a record high last week of more than 2 million barrels a day, according to EIA data.
That could cause some doubt among OPEC members on whether or not to reduce their own production as U.S. producers encroach on global market share, some analysts said.
"It probably makes them flinch just a bit," Mr. Yawger said.
Gasoline futures rose 0.5% to $1.7410 a gallon and diesel futures fell 1% to $1.8625 a gallon.
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(END) Dow Jones Newswires
November 01, 2017 16:08 ET (20:08 GMT)