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NYMEX crude down in Asia after API shows build in stocks

Published 08/30/2016, 07:13 PM
Updated 08/30/2016, 07:16 PM
© Reuters.  NYMEX eases in Asia after API build
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Investing.com - Crude dropped in Asia on Wednesday after U.S. industry estimates showed a build in stockpiles last week.

Crude oil for October delivery on the New York Mercantile Exchange fell 0.28% to $46.22 a barrel.

The American Petroleum Institute said crude oil stockpiles rose 942,000 barrels at the end of last week and gasoline supplies dropped 1.6 million barrels as the summer driving season nears a close. Distillate supplies rose by 3 million barrels.

Official data from the Energy Information Administration will be released Wednesday.

Overnight, oil prices were higher during North American hours on Tuesday, rebounding from steep overnight losses.

Meanwhile, on the ICE Futures Exchange in London, Brent oil for November delivery inched up 23 cents, or 0.47%, to trade at $49.69 a barrel after falling 70 cents, or 1.4%, on Monday.

Oil's losses on Monday came as a broadly stronger U.S. dollar, fading hopes of a production freeze and concerns about additional output from the Middle East and Africa weighed on sentiment.

An increase in U.S. interest rates tends to lift the dollar, which would make oil more expensive for traders who conduct business in other currencies.

Meanwhile, chances that the upcoming meeting among major oil producers in late September would yield any action to reduce the global glut appeared minimal after Saudi Arabia's energy minister said last week that he does not believe any "significant intervention" in the oil market is necessary.

His reported comments come ahead of an informal meeting of the Organization of the Petroleum Exporting Countries in Algeria late next month, during which major oil producers are expected to discuss a potential output freeze.

However, analysts and traders remain skeptical the meeting would result in a coherent effort to reduce the global glut. Crude prices soared almost $10 a barrel, or nearly 25%, in the first three weeks of August, as the prospect of an output freeze by major producers at an informal OPEC meeting in Algeria next month sparked a massive rally.

An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.

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