Libya has boosted crude production by more than 70 per cent since August as some oilfields resumed output and export terminals in the Opec country reopened for their first overseas loadings in two years.
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Investors are also focused on the Federal Reserve’s September monetary policy meeting, concluding later Wednesday.
On the NYMEX, crude oil for November delivery hit a six-week low of $42.47 previously on Friday when signs of an ongoing recovery in U.S. drilling activity arose.
Brent futures closed down 7 cents at $45.88 per barrel.
US crude oil settled up on Tuesday on speculation of demand from the planned restart of the country’s main gasoline pipeline, before being joined by Brent in a post-settlement rally on data showing a surprise USA inventory drawdown.
“We may be starting see a change of attitude in Riyadh”, said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
The tanker Seadelta returned to take on crude at the port of Ras Lanuf after interrupting loading and sailing away to safety due to the fighting earlier this week, said Nasser Delaab, the petroleum operations inspector at Harouge Oil Operations.
Oil prices gained Wednesday after preliminary data showed a drop in US crude inventories and as investors waited for the conclusion of the Federal Reserve’s policy meeting. The overall consensus is for a rate hike in December.
US West Texas Intermediate (WTI) crude futures CLc1 were up 1.79 percent, or 79 cents, at $44.84 a barrel at 0027 GMT, buoyed by a contractual rollover into higher-demand November as a front-month.
The U.S. Energy Information Administration (EIA) said crude inventories fell 6.2 million barrels last week, versus a 3.4 million-barrel build forecast in a Reuters poll. “The API surprise draw overnight is obviously leading to the question of whether we are going to see the same in the official inventory today”, CMC Markets strategist Jasper Lawler said. With commodities such as oil being priced in the greenback, big moves in the dollar usually have an outsize impact on prices.
“Wednesday has become “Big Wednesday” for oil traders, with not only the FOMC but also the EIA crude inventory numbers out”. It will continue increasing output “gradually and quietly”, Al-Amri said, without specifying a target.
Furthermore, Algerian Energy Minister Noureddine Bouterfa said on Tuesday that OPEC members could decide to hold an extraordinary meeting to discuss oil prices immediately after an informal gathering in Algiers next week.
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OPEC countries led by Saudi Arabia and non-cartel members headed by Russian Federation will be trying to negotiate an oil production freeze in order to stabilize prices.
