NYMEX crude down in Asia as API data weighs, U.S. DoE ahead

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Investing.com - Crude oil futures fell on Wednesday in Asia after industry data showed a larger expected build in U.S. stockpiles.

On the New York Mercantile Exchange, WTI crude for April delivery dropped 0.93% to $34.08 a barrel. Brent crude eased 0.19% to $36.74 a barrel.

U.S. API weekly crude stocks rose more-than-expected last week, the American Petroleum Institute said late Tuesday, up 9.9 million barrels, compared to a 7.1 million barrels build in the preceding week and well above the 2.5 million barrels gain seen.

U.S. weekly distillates stocks rose 2.7 million barrels, while the weekly gasoline stocks dropped 2.2 million barrels.

Later on Wednesday the U.S. Energy Information Administration (EIA) releases its Weekly Petroleum Status Report and analysts are bracing for a 3.5 million build in stockpiles for the week ending on Feb. 26.

A week earlier crude inventories rose by 3.5 million barrels to an all-time high of 507.6 million, as storage levels at the nation's top facilities continue to approach full capacity.

At the same time, oil services firm Baker Hughes said last Friday that the number of oil rigs nationwide fell by 13 to 400 for the week ending on Feb. 19, marking its 10th straight week of declines.

While U.S. shale producers have demonstrated surprising resiliency by drilling at near maximum efficiency, falling rig counts typically provide lagging signals of imminent declines in output. As markets worldwide remain awash in a glut of oversupply, any major production cuts are viewed as bullish for crude.

Overnight, crude futures closed moderately higher on a choppy day of trading, as investors weighed the possibility that U.S. shale producers could be on the verge of cutting output with the increasing likelihood that OPEC may resist cutting production for the remainder of the year.

On the Intercontinental Exchange, Brent crude for May delivery traded between $35.95 and $37.24 a barrel, before closing at $36.85, up 0.28 or 0.74% on the session. North Brent Sea futures have also jumped by more than 15% since falling below $30 a barrel on February 11.

U.S. crude futures briefly fell below $33.50 a barrel on Tuesday, as investors reacted to bearish reports that OPEC could leave its production ceiling at near-record highs for at least the next several months. When OPEC convenes in Vienna for its semi-annual meeting, it is unlikely that the world's largest oil cartel will complete any drastic steps to cut production, according to OPEC sources and delegates surveyed by Reuters.

Crude prices have tumbled more than 60% over the last 15 months since OPEC rattled global energy markets with a shocking decision to maintain production above 30 million barrels per day at a meeting in November, 2014.

On Monday, crude futures rose more than 3% after a Reuters survey indicated that OPEC production in February fell by 28,000 bpd to 32.37 million bpd, amid a disruption at a major pipeline in Iraq. OPEC sources, according to Reuters, disclosed that the group is hesitant to cut production until it receives more clarity on Iran's long-awaited return to global markets. Last month, Iran ramped up its exports to 1.75 million bpd, the survey found.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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