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Oil Continues Lower Amid Bets For Bearish U.S. Supply Data

Published 03/28/2018, 05:02 AM
Updated 03/28/2018, 05:02 AM
© Reuters.  Oil on the back foot ahead of U.S. supply data

© Reuters. Oil on the back foot ahead of U.S. supply data

Investing.com - Crude prices continued to track lower on Wednesday, amid speculation weekly supply data due later in the day will show a big buildup in U.S. oil supplies.

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended March 23 at 10:30AM ET (1430GMT).

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 5.3 million barrels last week.

The API report also showed a drop of 5.8 million barrels in gasoline stocks, while distillate stocks, which include motor diesel and heating oil, fell by about 2.2 million barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

U.S. West Texas Intermediate (WTI) crude futures lost 67 cents, or roughly 1.1%, to $64.56 a barrel by 5:00AM ET (0900GMT).

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., declined 56 cents, or 0.8%, to $68.91 a barrel.

Elsewhere, in Asia, Shanghai crude oil futures saw their third day of trading continuing with high volume and volatile trading. Spot Shanghai crude futures sank almost 4%.

Oil prices ended lower on Tuesday, as rising drilling activity in the United States pointed to further increases in shale output, underlining concerns about a return of oversupply.

Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.

OPEC, along with some non-OPEC members led by Russia, have been restraining production by 1.8 million barrels per day (bpd) to curb the market of excess supply. The arrangement, which was adopted last winter, expires at the end of 2018.

Saudi Crown Prince Mohammed bin Salman said Tuesday that Riyadh and Moscow were considering greatly extending the supply cut deal, with a partnership to manage global inventories potentially growing "to a 10-to-20-year agreement."

In other energy trading, gasoline futures were little changed at $2.016 a gallon, while heating oil shed 0.6% to $2.012 a gallon.

Natural gas futures held steady at $2.714 per million British thermal units.

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