Traders and investors were looking ahead to data from the U.S. Energy Information Administration on Thursday, delayed by a day due to a holiday.
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Oil prices have collapsed over the past 18 months, and have caused a wave of destruction to the economies of Canada, Russian Federation and Saudi Arabia, which have depended upon their oil reserves to stimulate their economies. Key market uncertainties include the pace and volume at which Iranian oil reenters the market, the strength of oil consumption growth, and the responsiveness of non-OPEC production to low oil prices.
Crude has dropped about 40% in the past year as Opec defends its market share against rivals such as the United States shale industry, which is faltering only gradually despite the price collapse.
“It’s another data point highlighting the oil glut in the USA, or the global markets for that matter”, said analyst Chris Jarvis of Caprock Risk Management in Frederick, Maryland.
There are signs the a few fuel storage depots in the eastern hemisphere have been filled to capacity, the agency said. Refineries did process more crude last week than the week before, but crude stockpiles still grew because imports and production also rose. The markets had expected supplies to build by about 1.3 million barrels, according to a survey compiled by Bloomberg.
“With USA commercial crude cover likely to see new 80-year highs by month’s end amidst a few indications that the rate of production decline is slowing, our long held view that WTI will be re-visiting the late August lows of $37.75 has been reinforced”, wrote Jim Ritterbusch of Chicago oil consultancy Ritterbusch & Associates.
OPEC’s collective output target level stands at 30 million barrels per day. Diesel futures fell 2.5% to $1.4116 a gallon. OPEC ministers will meet on December 4 in Vienna to review their current policy.
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The IEA forecast, dubbed World Energy Outlook 2015, predicts that global demand for petroleum will rise by 900,000 barrels per day by 2020.
