Crude prices fell on Wednesday, extending losses into a third session, amid speculation weekly supply data due later in the day will show an increase in U.S. oil and fuel supplies.
The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended Jan. 26 at 10:30AM ET (1530GMT).
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by nearly 3.2 million barrels last week, compared with analysts’ expectations for a more modest increase of around 0.1 million barrels.
The API report also showed a gain of 2.6 million barrels in gasoline stocks, while distillate stocks, which include motor diesel and heating oil, fell by about 4.0 million barrels.
There are often sharp divergences between the API estimates and the official figures from EIA.
U.S. West Texas Intermediate (WTI) crude futures slumped 44 cents, or 0.7%, to $64.06 a barrel by 3:45AM ET (0845GMT), its lowest level in around a week. On Tuesday, the U.S. benchmark fell $1.06, or 1.6%, to $64.50 a barrel.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., declined 42 cents, or roughly 0.6%, to $68.10 a barrel, after losing 68 cents, or 1%, a day earlier.
Oil prices ended lower on Tuesday, pulling further away from their strongest levels since late 2014, as traders weighed a steady increase in U.S. output against OPEC’s ongoing efforts to drain the market of excess supplies.
Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing OPEC’s effort to curb excess supply.
Oil prices have risen almost 55% from around $43 a barrel in June, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
In other energy trading, gasoline futures dropped 0.2% to $1.851 a gallon, while heating oil shed 0.4% to $2.059 a gallon.
Natural gas futures sank 13.5 cents, or 4.3%, to $3.059 per million British thermal units, as updated weather forecasting models called for milder weather, which should dampen demand for the heating fuel.
