Investing.com - Crude traded weaker in Asia on Wednesday as doubts over OPEC production cuts began to spread and the American Petroleum Instute reported an increase in U.S. supplies of crude.
U.S. crude oil inventories estimates from the American Petroleum Institute API) on Tuesday reportedly showed an increase of 1.6 million barrels for the week to July 14, against an expected drop of 3.740 million barrels. Inventories of distillates were dropped 2.9 million barrels, according to reports. The market will now look to data from the Energy Information Administration on Wednesday.
On the New York Mercantile Exchange crude futures for August delivery dropped 0.15% during the morning in Asia to $46.33 a barrel, while on London's Intercontinental Exchange, Brent lost 0.12% at $48.78 a barrel.
U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said last Friday, with five new rigs added on average for each of the last five weeks. The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
In Asia, China's refinery activity continued to indicate strong demand, with oil refineries increasing throughput in June. The bullish data from China, coincided with a report from the International Energy Agency released last week, suggesting that stronger consumption in the second half of the year could offset the glut in supply.
Overnight, tiny OPEC member Ecuador said would not be able to abide by the group's production curbs. The country had promised to cut 26,000 barrels of oil per day, a small fraction of the 1.8 million barrels per day the cartel has agreed to cut. The fear, however, is that Ecuador's move could push others to follow suit.