US Crude Oil Drops In Asia After API Estimates, EIA Data Awaited

Investing.com – Crude oil prices fell in Asia on Wednesday as U.S. industry inventory data weighed on sentiment and markets noted a more downbeat forecast for demand in 2018 by the IEA overnight.

On the New York Mercantile Exchange crude futures for December delivery fell dropped 1.15% to $55.06 a barrel, while on London’s Intercontinental Exchange, edged down 0.02% to $61.41 a barrel.

oil inventories rose 6.531 million barrels last week, the American Petroleum Institute said Tuesday, missing expectations for a draw, while gasoline supplies increased by 2.399 million barrels and distillates fell by 2.572 million barrels.

Crude oil stocks in the U.S. were seen down 2.850 million barrels, while distillates were expected to post a drop of 1.775 million barrels and gasoline inventories expected down 1.025 million barrels.

The API estimate are followed by official data from the Energy Information Administration on Wednesday. The API and EIA figures often diverge.

Overnight, crude oil prices settled near two-week lows after the International Energy Agency (IEA) revised down its forecast for global demand growth and said it expects U.S producers to ramp up output.

Crude prices came under pressure after the EIA revealed a somewhat downbeat outlook for oil demand in its monthly report, forecasting weakness in global demand growth, while warning that global oil markets will be oversupplied through the second quarter of 2018.

The IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and 2018, to an estimated 1.5 million bpd and 1.3 million bpd, respectively, as warmer temperatures were expected to weigh on consumption while rising output might add to glut in the crude supplies.

The reported said, however, that OPEC member compliance with deal to curb output improved, rising to 96% in October from 87% in September.

In May, Opec producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November last year.

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