Investing.com - Oil prices fell on Wednesday, pressured lower by an unexpected increase in U.S. inventories and doubts over OPEC’s ability to curtail supply and rebalance the oversupplied global market.
U.S. West Texas Intermediate crude futures were down 30 cents, or around 0.65%, to $48.81 a barrel by 04.22 a.m. ET (08.22 a.m. GMT) from its last settlement.
International benchmark Brent crude futures were down 33 cents or 0.62% to $51.50 a barrel on the ICE Futures Exchange in London.
The American Petroleum Institute reported late Tuesday that U.S. crude inventories rose by 1.8 million barrels to 488.8 million last week.
The data undermined optimism that recent reports showing inventory drawdowns were an indication that the U.S. market is tightening.
Official storage figures were due to be published by the U.S. Energy Information Administration later on Wednesday, with a consensus forecast for a drawdown of 2.9 million barrels.
Oil prices were also under pressure amid fresh doubts over how effective production cuts by the Organization of the Petroleum Exporting Countries will be at reducing the global supply glut.
A Reuters survey this week showed OPEC production climbing in July to the highest level since December 2016.
The increase in production is threatening to undermine efforts by leading OPEC member Saudi Arabia, which has announced plans to cap exports and enforce compliance in reducing output.
OPEC, together with several other major oil-producing nations, agreed to cut production late last year and extended the deal through March 2018, but traders have become more doubtful over the effectiveness of the agreement in rebalancing the market.
Meanwhile, U.S. shale production has ramped up since the agreement was reached, offsetting the OPEC cuts.
Elsewhere on Nymex, gasoline futures fell to $1.6530 a gallon, while September heating oil was down 0.18% to $1.6383 a gallon.