Investing.com – West Texas Intermediate pared losses in North American trade on Wednesday, after data showed that oil supplies in the U.S. registered a much higher-than-expected inventory build, but gasoline and distillate stocks both declined more than forecast
Crude oil for April delivery on the New York Mercantile Exchange fell 42 cents, or 0.79%, to trade at $52.72 a barrel by 10:34AM ET (15:34GMT) compared to $52.46 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 8.209 million barrels in the week ended March 3. Market analysts' had expected a crude-stock build of 1.967 million barrels, while the American Petroleum Institute late Wednesday reported a supply increase of 11.60 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 0.867 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 528.4 million barrels as of last week, according to press release, which the EIA considered to be “near the upper limit of the average range for this time of year”.
The report also showed that gasoline inventories decreased by 6.555 million barrels, compared to expectations for a draw of 1.400 million barrels, while distillate stockpiles fell by 2.676 million barrels, compared to forecasts for a decline of 0.900 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery traded down 31 cents, or 0.51%, to $55.61 by 10:38AM ET (15:38GMT), compared to $55.32 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $2.88 a barrel by 10:38AM ET (15:38GMT), compared to a gap of $2.78 by close of trade on Tuesday.
Oil prices have been trading in a narrow $5 range around the mid-$50s over the past two months as sentiment in oil markets has been torn between rising stockpiles and increased shale production in the U.S. and hopes that oversupply may be curbed by output cuts announced by major global producers.
Saudi Energy Minister Khalid al-Falih gave mixed messages on future production cuts by the Organization of the Petroleum Exporting Countries.
Speaking at the CERAWeek energy conference in Houston, Falih said last year's historic agreement by OPEC and non-OPEC countries to curb supply and raise oil prices has improved market fundamentals. Still, it was premature to consider whether or not the cuts should be continued into the second half of the year, he added.
OPEC and non-OPEC countries have made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, with compliance currently at around 94%.
Any decision to extend OPEC production cuts past June would have to include the continued participation by the non-OPEC members of the November accord, OPEC Secretary General Mohammad Barkindo said on Tuesday.
The next monitoring meeting is tentatively scheduled for March 22 and 23 in Kuwait to assess progress in the production cut agreement, while OPEC’s next official meeting is currently scheduled for May 25 in Vienna.