Tribble Agency
Tribble Agency


WTI oil futures plunge below $45 after bearish United States supply report

Industry group American Petroleum Institute (API) said in a preliminary report US crude stockpiles had risen 7 million barrels last week, way above the 3.7 million barrels expected by analysts in a Reuters survey.

Wednesday's weekly data showed the fourth consecutive weekly build in USA inventories and the second second consecutive gain of more than 7.5 million barrels.

Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at professional services firm EY, said the market would also be seeking clues from a meeting of OPEC and non-OPEC technical experts in Vienna on Wednesday.

My biggest worry now is not the non-OPEC members but the Gulf-producing countries, which may not show any respect for a quota system or any kind of limits, he said. "OPEC should decide to manage the market by reducing the level of production".

Oil prices steadied Tuesday after heavy losses the previous day, as markets looked ahead to more indications of world crude demand levels amid high supplies.

"A 500,000-barrel increase in Iran's oil production will take place in less than a week after the effective lifting of sanctions", Shana quoted Javadi as saying.

Crude production was unchanged at 9.1 MMbpd last week, the EIA said.

Iran is expected to boost oil production when worldwide sanctions are lifted after it implements the conditions of a nuclear deal agreed with major world powers. Brent North Sea crude for December delivery, the worldwide benchmark, fell to US$47.85 a barrel in London trade, down 86 cents (1.8 per cent) from Tuesday's close.

Investors awaited official oil inventory figures from the U.S. Energy Information Administration, due at 10:30 a.m. ET to see if they confirmed the API data.

Brent for December delivery was down 76 cents at $49.70 a barrel at 0952 GMT.

On Nymex, November gasoline settled at $1.281 a gallon and November heating oil finished at $1.45 a gallon, with both barely higher for the session. "Although there is little chance of any concrete steps to reduce the oversupply being agreed, the vague prospect of a minimal consensus should at least discourage market participants from betting on further falling prices", said analysts from Commerzbank, as reported by the Wall Street Journal.

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