Investing.com - Crude oil prices dropped sharply in Asia on Wednesday as U.S. industry estimates showed a surprise build in stocks.
The American Petroleum Institute reported a 4.6 million barrel build in crude stocks last week, well above general expectations for a drop of 0.5 million barrels for the week ending on September 25.
Later Wednesday, more closely-watched data from the U.S. Department of Energy is due.
On the New York Mercantile Exchange, WTI crude for November delivery dropped 1.13% to $44.72 a barrel.
Last week, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. crude inventories decreased by 1.9 million barrels for the week ending Sept. 18, extending a 2.1 million barrel draw from a week earlier. At 454.0 million barrels, U.S. crude stockpiles last week still remained near their highest levels in at least 80 years.
U.S. crude production, meanwhile, crept up last week, ending a seven-week streak of declines. Crude output nationwide rose by 19,000 to 9.136 million barrels per day, following a moderate increase in Alaskan ouput. In early-June, crude production in the U.S. peaked above 9.6 million barrels per day, its highest on record in more than 40 years. U.S. shale producers, however, have been forced to slash output as crude prices have remained under $50 a barrel over the last two months.
Overnight, crude futures rose considerably on Tuesday erasing most of their losses from the previous session, ahead of the release of the American Petroleum Institute's weekly crude supply report after the close of trading.
On the Intercontinental Exchange (ICE), Brent crude for November delivery wavered between $47.27 and $48.62 a barrel, before closing at $48.27, up 0.92 or 1.95% on the day. The spread between the international and U.S. domestic benchmarks of crude stood at $3.00, slightly above Monday's level of $2.98 at the close.
On Monday, Shell (LONDON:LONDON:RDSa) announced that it would halt offshore drilling in Alaska for the near future after a critical exploration well failed to produce sufficient levels of oil and gas. In May, the company received approval from the federal government to drill in the Chukchi Sea, located about 150 miles from Barron, Alaska.