Analysts say oil could remain under pressure as USA refineries undergo seasonal maintenance this fall and typically reduce their need for crude oil between late August and October.
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Investors looked ahead to the publication of the U.S. Energy Information Administration’s weekly report on oil supplies at 14:30GMT, or 10:30AM ET, Wednesday amid expectations for a drop of 1.025 million barrels.
US West Texas Intermediate (WTI) crude futures were down 88 cents, or 2 per cent, at $41.89 per barrel by 1627 GMT (9:57 p.m.in India).
OPEC also forecasts in 2016 daily demand for oil will increase by 0.09 mln barrels/day and to reach – 94,26 mln barrels/day.
Brent crude futures LCOc1 settled down 93 cents, or 2 percent, at $44.05.
Since 2014, Saudi Arabia has resisted pressure from other producers to cut production, betting that the low oil prices will force other exporters, such as the U.S., to cut their output.
“In any case, many oil forecasters, including the EIA, expect the crude market to be under-supplied in the second half of next year”.
Some see oil prices rebounding, citing Venezuela’s renewed efforts to get OPEC to cooperate with other oil producers on reducing output after a failed effort in April.
In Singapore, oil refining profits dropped to two-year lows today, in the latest sign that the industry is pumping too much fuel for the market to absorb.
Despite the insistence by Mohammed Bin Saleh Al-Sada, the president of OPEC and Qatar’s energy minister, that the oil price slump is “only temporary” and the market remains on track to recover, the idea of the informal meeting underlines the precarious situation facing many countries that rely on oil to keep their economies afloat. In 2017, non-OPEC supply is expected to decline by 0.15 mln barrels daily, following a downward revision of 40,000 barrels a day. United States inventories rose by 2.09 million barrels last week, the American Petroleum Institute was said to report. Platts reports higher numbers, with output from Saudi Arabia for July climbing to a record level of 10.673 million bpd. Gasoline inventories are expected to decline 1.2 million barrels while distillates are forecast to rise by 375,000 barrels.
Top crude exporter Saudi Arabia boosted its oil output to a record high of 10.67 million barrels-per-day (bpd) in July, the kingdom told the Organization of the Petroleum Exporting Countries.
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The oil cartel produced just over 33.1 million barrels of oil per day in July, up 46,400 barrels compared to June, it said in a new report released Wednesday.
