Investing.com - Oil prices edged lower on Wednesday, pulling back from their strongest levels in three-and-a-half-years as investors looked ahead to fresh weekly data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.
The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended May 18 at 10:30AM ET (1430GMT), amid forecasts for an oil-stock drop of 1.5 million barrels.
Analysts also forecast a fall of 1.4 million barrels for gasoline stockpiles, while distillate inventories are expected to drop by 1.3 million barrels.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories declined by 1.3 million barrels last week.
The API data, however, showed a rise of 980,000 barrels in gasoline stockpiles, while inventories of distillates declined by 1.3 million barrels.
There are often sharp divergences between the API estimates and the official figures from EIA.
New York-traded WTI crude futures shed 23 cents, or roughly 0.3%, to $71.97 a barrel by 2:55AM ET (0655GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., slipped 48 cents, or about 0.6%, to $79.08 a barrel.
Despite the dips, both oil benchmarks remained close to their November 2014 highs of $72.90 and $80.49 a barrel respectively, reached the previous day, as investors fretted over the future output from Venezuela and Iran.
OPEC may decide to raise oil output as soon as June after Washington raised concerns the oil rally was going too far, according to sources. Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production and how many barrels each member can add, the sources said.
The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC’s target.