NYMEX crude dips in early Asia despite strong API fall in crude stocks

Investing.com - Crude oil prices dipped in early Asia on Wednesday despite upbeat U.S. industry supply data as the bearish market tone on overall demand prospects continues.

The American Petroleum Institute reported that crude stocks dropped 4 million barrels last week, while distillates gained 9.1 million barrels and gasoline inventories increased 6.9 million barrels. More closely watched U.S. Department of Energy figures due Wednesday are expected to show a crude stocks gain of 880,000 barrels, distillate inventories up 1.86 million barrels and gasoline supplies increased 3.38 million barrels

On the New York Mercantile Exchange in early Asian trading Wednesday, crude oil for delivery in February fell 0.33% to $48.01 a barrel.

Brent, the global benchmark, fell 3.8% to $51.10 a barrel on ICE Futures Europe on Tuesday.

Overnight, West Texas Intermediate oil futures fell below the $49-a-barrel level on Tuesday, while Brent also hit a fresh five-and-a-half year low, as investors piled on to their short positions in anticipation of lower prices amid lingering concerns over a growing supply glut.

Appetite for riskier assets weakened amid uncertainty over Greece’s future in the euro zone if left-wing anti-austerity party Syriza win elections due to be held later this month.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

London-traded Brent prices lost nearly 48% in 2014, while WTI futures dropped almost 46% after the Organization of Petroleum Exporting Countries decided to maintain its output target at 30 million barrels a day.

The decision disappointed hopes the oil cartel would lower production to support the market, as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years.