Oil prices fell further on Wednesday, extending sharp losses from the previous session amid speculation weekly supply data due later in the day will show a large increase in U.S. crude inventories.
The U.S. Energy Information Administration will release its official weekly oil supplies reportfor the week ended Nov. 10 at 10:30AM ET (1530GMT).
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 6.5 million barrels last week. That compared with analysts’ expectations for a decline of around 2.2 million barrels.
The API report also showed a gain of 2.3 million barrels in gasoline stocks, disappointing forecasts for a drawdown, while distillate stocks fell by 2.5 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 shed 56 cents, or about 1%, to $55.14 a barrel by 3:30AM ET (0830GMT). It reached its worst level since Nov. 3 at $54.81 in the last session.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 58 cents, or 1%, to $61.63 a barrel. The global benchmark also hit its lowest since Nov. 3 at $61.21 a day earlier.
Oil prices lost almost 2% on Tuesday after the International Energy Agency cut its global oil-demand forecasts and projected an increase in U.S. shale production, casting doubts over the past few months’ narrative of tightening energy markets.
This week’s price drop means that crude futures are now down by around 5% since reaching 28-month highs last week, ending an impressive 40% rally between June and early November.
Despite the cautious sentiment, crude prices are expected to remain supported amid optimism that oil producing countries will agree to extend an output cut at their meeting at the end of this month.
Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.
In other energy trading, gasoline futures were little changed at $1.740 a gallon, while heating oil declined 1.3 cents, or 0.7%, to $1.893 a gallon.
Natural gas futures lost another 1.7 cents, or almost 0.6%, to $3.085 per million British thermal units. It is down around 4% so far this week amid forecasts for less heating demand through the end of this month.
