Investing.com - Crude prices fell in Asia on Thursday as investors increasingly weight the prospect of a stronger dollar on a likely Federal Reserve rate hike this year and continued global oversupply.
On the New York Mercantile Exchange, WTI crude for October delivery traded fell 0.78% to $45.89 a barrel.
Overnight, crude futures edged up on Wednesday on a choppy day of trading, amid sharp increases in U.S. stockpiles last week in combination with the first monthly decline in OPEC supply since February, as the global supply-demand imbalance remained in focus.
On the Intercontinental Exchange (ICE), Brent crude for October delivery wavered between $47.74 and $50.78 a barrel, before settling at $50.48, up 0.92 or 1.87% on the day. The spread between the international and U.S. domestic benchmarks of crude stood at $4.22, slightly above Tuesday's level of $4.17.
Crude futures pared earlier gains on Wednesday morning after the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. crude stockpiles rose by 4.7 million barrels last week, significantly above expectations for a build of 700,000. At 455.4 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.
On the whole, analysts expect U.S. crude inventories to move higher over the next several weeks as seasonal demand levels off after Labor Day due to the end of the summer driving season. For the week ending on Aug. 28, gasoline inventories fell by approximately two million barrels, significantly below estimates of a 270,000 draw.
After falling by several dollars per barrel in the morning session, crude futures rebounded in afternoon trading following sharp declines in OPEC supply last month. In August, OPEC supply fell to 31.71 million barrels per day, down from a revised level of 31.88 in July – marking its first monthly decline in seven months. The data was compiled according to a Reuters' survey of sources from OPEC, oil companies and industry consultants.
During the month, Iraqi supply decreased by 40,000 bpd to around 3 million, amid a disruption in flow from a pipeline, which transports crude owned by the Iraqi state-owned oil marketing company and the Kurdistan Regional Government. Meanwhile, output from Saudi Arabia remained relatively stable after mild declines in July. In addition, small increases in Nigeria and Algeria were partly offset by decreases in Libya.
Elsewhere, U.S. president Barack Obama secured critical support for the White House's nuclear deal when Senator Barbara Mikulski (D, Maryland) pledged to uphold an expected veto of a Republican-led measure of disapproval. Mikulski is the 34th senator to offer support for the agreement, providing Obama with the votes needed to complete the accord.
When a framework of a deal was reached between Iran and a group of major Western powers in April, Facts Global Energy, an energy consulting firm, forecasted that the Iranian oil exports could reach a level of 1.7 million barrels per day within 12 months of the easing of longstanding economic sanctions against the gulf state. Iran is reportedly hoarding 30 million barrels of crude ready for export.