U.S. oil prices slid to a near three-week low in early Asian trade Wednesday on expectations that U.S. crude stocks expanded last week, exacerbating the already oversupplied market.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October CLV7, -0.54% fell to $46.20 a barrel in the Globex electronic session, the lowest intraday level since Aug 12. Oil prices have since inched up to $46.32, a drop of 4 cents. October Brent crude LCOV7, 0.66% on London’s ICE Futures exchange was flat at $48.37 a barrel.
Data by industry group American Petroleum Institute late Tuesday showed U.S. crude stocks rose by 942,000 barrels in the week ended Aug. 26. The group also forecast gasoline stocks to have fallen by 1.6 million barrels and a 3 million-barrel increase in distillate inventories.
“Overall, we don’t see the API data as enough of a surprise to give prices a strong push,” said Tim Evans, a Citi Futures analyst. Official data by the U.S. Energy Information Administration will be released later today.
Traders and analysts surveyed by The Wall Street Journal expect the EIA to report that crude stockpiles rose by 1.2 million barrels in the week ended Aug. 26, while supplies of gasoline also fell.
For over two years, the global oil market has been roiled by a tenacious surplus of crude. The glut was mainly a consequence of major producers, in particular members of the Organization of the Petroleum Exporting Countries, opting to ramp up their production to protect their market shares, rather than scale back output to boost prices.
While prices have risen from a 13-year low seen in February, investors are still skittish about the market’s nearterm growth, given that most heavyweight OPEC producers remain stubborn about their market-share first tactic.