Oil falls after US inventories show buildup
[TOKYO] Crude oil futures fell in early Asian trade on Wednesday after US inventories showed a weekly buildup that far exceeded analyst expectations.
The American Petroleum Institute said late on Tuesday that US crude oil stockpiles rose by 4.6 million barrels to 457.8 million barrels in the week to Sept 25. Analysts polled by Reuters had expected an increase of only 102,000 barrels.
Front-month US crude had dropped 47 cents, or more than 1 per cent, to US$44.76 a barrel by 0142 GMT. The contract settled Tuesday's trade at US$45.23 a barrel, up 80 cents, or 1.8 per cent, on the day.
Brent crude, the global oil benchmark, fell 35 cents to US$47.88 a barrel. On Tuesday, the contract rose 89 cents, or 1.9 per cent, to US$48.23.
The US government's Energy Information Administration (EIA) will issue official weekly inventory data on Wednesday.
Wednesday's session may have added volatility due to the close of September and third-quarter trading, according to some analysts.
US crude is heading for a 9-per cent decline this month as the slump in commodities continues amid deepening concerns over China's slowing economic growth.
Brent crude is on track to round out September with a near 12-per cent drop.
Prices are unlikely to move substantially higher in the near term because demand growth is easing and likely to continue slowing into 2016, Rhidoy Rashid, oil analyst at consultancy Energy Aspects, told Reuters Global Oil Forum. "We see demand growth easing from 1.5 million bpd (barrels per day) to 1 million bpd next year," Mr Rashid said.
He expects supplies to swing into a year-on-year decline, but prices "need to be low for at least the next six months - so in the US$45-$55 range - to ensure a proper rebalancing."
REUTERS
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