NYMEX crude oil up in Asia as API shows supply drop in past week

Investing.com - Crude oil prices gained in Asia on Wednesday after industry data on U.S. crude supplies in th past week showed a drop, though less than expected for more closely watched government data.

On the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in December traded at $77.34 a barrel, up 0.27%, after hitting an overnight session low of $75.92 a barrel and off a high of $78.41 a barrel.

Brent, the global benchmark, fell 2.3% to $82.82 a barrel on ICE Futures Europe Tuesday, the lowest settlement since Oct. 21, 2010.

The American Petroleum Institute on Tuesday showed a 640,000-barrel decline in crude stocks last week, a 240,000-barrel increase in gasoline supplies and a 150,000-barrel build in distillate inventories.

The Department of Energy release figures later Wednesday expected to show crude inventories dow 1.9 million barrels.

Overnight, crude futures took a beating, dipping to three-years lows after Saudi Arabia said it would cut the price of oil it sells to U.S. buyers.

Saudi Arabia on Monday cut its selling price for oil bound for the U.S., suggesting that the kingdom is trying to compete with U.S. shale oil for market share.

U.S. hydraulic fracking operations cost more to extract oil than producers in the Middle East, leaving Saudi Arabia hoping lower oil prices will prompt U.S. producers to halt operations and let the market absorb excess supply and eventually drive prices higher.

Elsewhere, soft U.S. data and a European Commission move to cut growth forecasts added to the selloff by stoking concerns demand will remain soft while supply ample.

U.S. factory orders fell for a second consecutive month in September, dampening optimism over the strength of U.S. recovery, official data revealed earlier.

The U.S. Census Bureau reported earlier that factory orders declined by 0.6% in September, in line with market expectations though still a decline nonetheless.

The August figure was revised to a 10% contraction from an initial 10.1% decline.

Elsewhere in the U.S., the Bureau of Economic Analysis said the country's trade deficit widened to $43.03 billion in September from $39.99 billion in August, whose figure was revised from a previously reported deficit of $40.1 billion.

Analysts had expected the U.S. trade gap to widen to $40.0 billion in September.

Meanwhile across the Atlantic Ocean, the European Commission cut its forecast for euro zone economic growth to 0.8% this year from a 1.2% forecast made in the spring, while the 2015 growth forecast dipped to 1.1% from 1.7%.

The commission added it expects euro area inflation to remain below the European Central Bank's target of close to but just below 2% until after 2016 at the earliest and warned that unemployment levels will remain at their current high levels for longer than previously expected.