Investing.com - Crude edged up slightly in Asia on Wednesday ahead of weekly U.S. industry inventory estimates later in the day expected to set the tone.
On the New York Mercantile Exchange crude futures for July delivery edged up 0.04% to $49.68 a barrel, while on London's Intercontinental Exchange, Brent was last quoted up 0.15% to $52.29 a barrel.
Later on Wednesday, the American Petroleum Institute (API) will release its estimates of crude and refined product inventories to be followed on Thursday with official data from the Energy Information Administration. The two sets of figures often diverge.
Currently , forecasts see a crude oil inventory fall of 2.830 million barrels and a drop of 970,000 barrels for gasoline stocks and a fall of 785,000 barrels for distillates.
Overnight, crude futures settled lower, as investors continued to question whether OPEC and its allies’ agreement to only extend, but not deepen, production cuts would reduce excess supply while expectations for an uptick in Libyan oil output added to oversupply concerns.
Investors braced for an uptick in global supply, as Libya’s Sharara oil field was expected to increase output to 800,000 barrels per day (bdp) from 784,000 bpd, after a technical issue that limited output was solved on Tuesday.
Investor concerns about the glut in supply come amid continued uncertainty as to whether the recent OPEC agreement to extend production cuts would reduce global output to the five-year average in the wake of a surge in U.S. shale production.
OPEC and non-OPEC members agreed to extend production cuts for a period of nine months until March last week, but stuck to production cuts of 1.8 million bpd agreed in November last year, against expectations that the oil cartel was set to announce deeper production cuts.
As part of the agreement, Nigeria and Libya will remain exempt from making cuts while Iran would be allowed to retain the right to increase production to the same reference level, around 3.797 million barrels a day, agreed in November last year.
Goldman Sachs (NYSE:GS) downgraded its forecasts for oil prices this year on Monday, targeting an average of $55.29 per barrel for Brent, down from its previous forecast of $56.76 a barrel while lowering its expectations WTI to $52.92 per barrel from $54.80.
"We believe we are in a lower for longer environment until there is greater evidence shale deliverability is surprising to the downside or OPEC runs out of spare capacity," a team of analysts at the bank said in a research note on Monday.