Oil prices declined Wednesday after a big build in U.S. crude inventories which spurred concerns that demand may not eclipse one of the biggest global surpluses in modern times.
On Tuesday the American Petroleum Institute said in a report that a rise in U.S. commercial crude stocks compiled 7.1 million barrels to 473 million barrels in the week to Oct. 16, crashing expectations for an increase of 3.9 million barrels.
Higher supply from the largest-producing
countries, along with slowing demand from emerging nations, has hurt the
price of oil in half over the last year. Analysts now say the oil price will hardly rise soon, as there is no evidence that the trend will change.
Brent crude for December was down 0.46% at $48.49 a barrel. U.S. crude futures for December delivery were down 1.04% to $45.81 a barrel.
Market players now look ahead to official oil inventory data from the
U.S. Energy Information Administration, due at 10:30 a.m. ET (1430 GMT)
to see if they confirmed the API data. The EIA is forecast to report a build in crude stocks for a fourth straight week.
"We've seen inventories build for the last three weeks now, which has helped ensure oil prices remain quite heavy," Oanda market analyst Craig Erlam said in a note. "Another build today, 3.5 million barrels expected, could add further downside."
Some consider crude markets could see some short-covering as a result of a sell-off that has pushed Brent down from a peak of above $54 a barrel two weeks ago.
Meanwhile, Reuters reports that open interest in Brent futures has climbed to 442,279 lots with the rollover of the front-month contract into December, just a few thousand contracts away from April's record, which could provide the market with a boost in case of a bigger price slide.
Officials from just five non-OPEC countries arrived to take part in a meeting of OPEC at its Vienna headquarters on Wednesday to discuss possible market collaboration. The meeting was unlikely to agree any coordination over supply, an OPEC delegate said.
