NYMEX crude falls in early Asia with focus on heavy supplies

Investing.com - Crude oil prices slipped further from overnight in Friday in early Asia as investors watch the supply/demand balance plays out that pits bulging inventories against efforts to curb production.

On the New York Mercantile Exchange, crude oil for June delivery fell 0.29% to $57.58 a barrel.

Overnight, crude oil futures slipped lower on Thursday, after data on Wednesday showed that U.S. crude inventories rose far more than expected last week and as market participants continued to focus on developments in Yemen.

Saudia Arabia resumed air strikes on Houthi-targets in the city of Aden on Wednesday despite increased calls from the White House for a diplomatic solution to the month-long conflict. Yemen is strategically located on one of the world's largest chokepoints of oil.

Wednesday's government report showed that U.S. crude oil stockpiles rose by 5.3 million barrels last week, compared to expectations for an increase of 2.8 million. Gasoline stockpiles dropped by 2.1 million barrels, exceeding expectations for a decline of 0.7 million.

The American Petroleum Institute had reported on Tuesday that U.S. crude inventories increased by 5.5 million barrels in the week ended April 17, accelerating from a gain of 2.3 million in the preceding week.

The report also showed that gasoline stockpiles rose by 1.1 million barrels, while distillate stocks increased by 1.7 million barrels.

U.S. oil futures have been well-supported in recent sessions due to mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months amid an ongoing collapse in rigs drilling for oil.

According to industry research group Baker Hughes (NYSE:NYSE:NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 26 last week to 734, the lowest since 2010. It was the 19th straight week of declines.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery dipped 4 cents, or 0.06%, to trade at $62.70 a barrel on Thursday.