Investing.com - Crude oil prices fell in Asia on Thursday with sentiment on efforts to curb production turning skeptical as several producers could stay outside of any pact to freeze output if reached.
On the New York Mercantile Exchange, WTI crude for May delivery fell 0.58% to $39.56 a barrel.
Overnight, U.S. crude futures fell more than 4% on Wednesday, erasing all of their gains from the previous session, as domestic stockpiles skyrocketed last week intensifying longstanding concerns related to the excessive supply glut on global energy markets.
Volatility remained high, as the front month contract for U.S. crude closed by more than 1% in a positive or negative direction from its previous session's settlement level for the 14th consecutive trading day. Despite Wednesday's sell-off, WTI crude is still up by approximately 40% from its level on February 11 when it hit 13-year lows at $26.05 a barrel.
On the Intercontinental Exchange (ICE), Brent crude for May delivery wavered between $40.43 and $41.80 a barrel, before closing at $40.51, down 1.28 or 3.06% on the trading day. North Sea brent futures have fallen slightly since reaching 2016 yearly highs last week when they jumped above $42.50. Since briefly dipping below $30 in mid-February, brent crude has rallied by more than 15%.
On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. Commercial Crude inventories for the week ending on March 16 rose by 9.4 million barrels from the previous week. It marked the second-highest weekly inventory build on the year. At 532.5 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. Investors initially expected a modest gain of 3.0 million barrels on the week, but shifted their expectations following a forecast of an 8.8 million build by the American Petroleum Institute on Tuesday afternoon.
The sizable build was offset by a draw of 1.258 million barrels at the Cushing Oil Hub in Oklahoma and further declines in production. For the week, U.S. crude output fell by 30,000 barrels per day to 9.038 million bpd, falling to levels last seen in November, 2014.
Elsewhere, oil received some upside pressure during the session after Nigerian officials said Wednesday they expect OPEC to approve a comprehensive production freeze at a highly anticipated meeting in Doha next month. The comments came one day after Libya joined Iran in rejecting an invitation to the OPEC-Non OPEC summit. The meeting will take place roughly two months after Saudi Arabia, Russia and two other OPEC producers bolstered oil prices by reaching a tentative agreement to freeze output at their respective levels from January.
Despite the recent rally, oil prices are still down by more than 60% from their peak in June, 2014 at $115 a barrel.