By Jenny W. Hsu
Crude-oil futures retreated in early Asian trade Wednesday on expectations that U.S. crude inventories were bolstered significantly last week, exacerbating the global glut that has kept prices in the doldrums for over two years.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $46.30 a barrel at 0238 GMT, down $0.37 in the Globex electronic session. January Brent crude on London's ICE Futures exchange fell $0.29 to $47.85 a barrel.
U.S. crude stockpiles are said to have swelled by 9.3 million barrels for the week ended Oct. 28, according to industry group American Petroleum Institute. The growth, if confirmed by the U.S. EnergyInformation Administration later Wednesday, would mark the biggest single-week growth since March. Analysts cite strong imports and low refinery utilization as reasons for the increase.
At 468.2 million barrels, U.S. crude oil inventories are above the 448-million-barrel inventory at this time last year, the EIA said last week.
The API also tipped a 3.6-million-barrel decrease in gasoline stocks and a 3.1-million barrel decline in distillate inventories.
"The overall impact may be cushioned by larger-than-expected draws in the products," said Tim Evans, a Citi Futures analyst.
International oil prices been falling for three straight sessions, largely weighed by dimming prospects that major oil producers will reach a deal to cut production by month-end as originally planned.
In September, leaders of the Organization of the Petroleum Exporting nations met and agreed to curtail the group's production, possibly by 200,000 to 700,000 barrels a day. The goal was to pump up prices by removing some unwanted barrels from the market.
The move nudged prices up initially, but with more countries asking to be exempt from the cut, the market fears even if an agreement is ratified at the Nov. 30 meeting in Vienna, the deal would be weak and overall production would still rise.
"Traders are selling on the assumption that there is now no prospect of OPEC implementing an effective production ceiling in the near future," said Ric Spooner, chief market analyst at CMC Markets.
Nymex reformulated gasoline blendstock for December--the benchmark gasoline contract--fell 171 points to $1.4670 a gallon, while December diesel traded at $1.5035, 134 points lower.
ICE gasoil for November changed hands at $435.25 a metric ton, down $1.50 from Tuesday's settlement.
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(END) Dow Jones Newswires
November 01, 2016 23:15 ET (03:15 GMT)
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