By Neanda Salvaterra and Alison Sider
Oil prices continued to edge down Wednesday, as growing global oil supplies have spread doubts about major producers' commitment to curtail output and on expectations that U.S. crude inventories may rise.
U.S. crude futures fell 81 cents, or 1.74%, to $45.86 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 79 cents, or 1.64%, to $47.35 a barrel.
On Tuesday, U.S. gas futures surged after an explosion and fire at a pipeline, owned by Colonial Pipeline Co., which delivers about one-third of the gasoline used on the East Coast. But gasoline prices but were already falling again on Wednesday morning.Gasoline futures were down 1.65 cents, or 1.11%, to $1.4676 a gallon. Diesel futures fell 3.98 cents, or 2.62%, to $1.4771 a gallon.
Investors are concerned that U.S. inventories may be rising.
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. Energy Information 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. The data from the U.S. Energy Information Administration is due at 10:30 a.m. EDT.
"The mega build that the API reported last night is also front and center here," said John Kilduff, founding partner of Again Capital. "Whatever trend people thought was emerging from past weeks of declines getting upended by last nights' report," he said.
Continued output growth from the Organization of the Petroleum Exporting Countries is also weighing on prices, making the prospect of a production cut by the cartel look more remote, Mr. Kilduff said.
In September, OPEC leaders 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 crude 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.
Recently, Iraq has been lobbying to get an exemption from the deal because of disruptions from Islamic State insurgency.
OPEC members Iran, Nigeria and Libya have already secured exemptions from the agreement because they have faced petroleum-output disruptions.
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.
"Prices continue to retrace lower and have wiped most of the OPEC premium," said Olivier Jakob an analyst from the Switzerland-based consultancy Petromatrix.
"[The oil cartel] has been talking about cutting production but production has been rising the crude oil markets are still under pressure from a lot of physical availability. " he said.
Jenny W. Hsu contributed to this article
Write to Neanda Salvaterra at email@example.com and Alison Sider at firstname.lastname@example.org
(END) Dow Jones Newswires
November 02, 2016 10:20 ET (14:20 GMT)
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