Investing.com - Crude prices held weaker in Asia on Wednesday after an unexpected build in U.S. crude inventories under industry estimates dampened sentiment.
On the New York Mercantile Exchange crude futures for June delivery dipped 0.10% to $49.51 a barrel, while on London's Intercontinental Exchange, Brent eased 0.08% to $52.53 a barrel.
Crude oil inventories unexpectedly rose 900,000 barrels at the end of last week, the American Petroleum Institute (API) said Tuesday, with gasoline stocks soaring 4.4 million barrels, widely missing an expected fall, and supplies of distillates down a less than expected 36,000 barrels.
A market survey expected a drop of 1.661 million barrels for crude, a decline of 1.073 million barrels for distillates and a 1.020 million barrels dip in gasoline. The crude market has continued to see supply outpacing demand and the build in crude and gasoline stocks, and less than expected drop, could hit sentiment hard if confirmed in official data.
The API figures will be followed by official data from the U.S. Energy Information Administration (EIA) on Wednesday at 10:30 a.m. EDT. There are often sharp divergences between the API estimates and the official figures from EIA.
Overnight, crude settled higher on Tuesday, snapping a six-day losing streak, as investors eyed the expected drawn down in U.S. crude inventories came against the backdrop of a wave of concerns that OPEC may not seek to extend its deal to cut supply beyond June, despite bullish comments concerning a possible deal extension from Saudi oil chief Khalid al-Falih.
“Consensus is building [concerning a possible deal extension], but it is not done yet,” Falih said last week. OPEC will decide at talks on May 25 whether to extend production cuts beyond June.
Despite the record compliance with the supply-cut agreement in March, inventories in industrial countries remained above the five-year average, which is a key metric OPEC monitors.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd). The deal to cut supply came into effect in January this year for a period of six-months until June.