Brent oil eases on concerns over U.S. supply, Asian demand

Updated: Wed, Feb 28, 2018
09:49 pm
Reuters
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Brent oil eased on Wednesday, ahead of data that is expected to show a rise in U.S. crude output and after industrial activity softened in some of the world`s major crude-consuming nations.

May Brent crude futures were down 8 cents at $66.55 a barrel by 1515 GMT. U.S. West Texas Intermediate crude futures were up 10 cents at $63.11, off a session high of $63.44.

Prices came under pressure earlier after three of the world`s top consumers of crude - China, India and Japan - reported a slowdown in monthly factory activity.

In the United States, the world`s biggest oil consumer, rising crude stockpiles and a drop in refinery runs weighed on prices.

Official weekly data from the U.S. government`s Energy Information Administration (EIA) is due later on Wednesday.

Soaring U.S. production has prevented oil prices from rising much above $70 a barrel this year, even though the Organization of the Petroleum Exporting Countries and Russia have reduced output.

"Climbing U.S. production continues to weigh on the market as traders fear that the OPEC output cuts will be nullified by the rising U.S. output," said William O`Loughlin, investment analyst at Australia`s Rivkin Securities.

U.S. crude production has risen by a fifth since mid-2016 to more than 10 million barrels per day .

"If today’s inventory report from the U.S. Department of Energy confirms this and shows not only rising U.S. crude oil stocks but also a further increase in U.S. oil production, prices are likely to fall further," Commerzbank said in a note.

The EIA will also release its monthly report on energy supply, which analysts expect to show another large upward revision to U.S. crude output figures.

"Last month, the revisions were a big contributor in the weakness that we saw in early February so ... trading is going to be trickier than usual," Petromatrix`s Jakob said.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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