By Jenny W. Hsu
Selling pressure in crude futures continued in Asian trading Wednesday amid renewed concerns about oversupply after weeks of gains on hopes of constrained output.
Oil fell for a second session overnight Tuesday, with Saudi Arabia's energy chief saying it's premature to assume the Organization of the Petroleum Exporting Countries will extend ongoing production cuts through the remainder of the year. The remark runs contrary to a report last week that the kingdom was very much behind prolonging the reductions.
"The market is getting very mixed signals," said a Singapore crude trader.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in May was recently down 9 cents at $52.32 a barrel in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell 14 cents to $54.75.
Investors for weeks have been awaiting the cartel's May 25 meeting, at which a decision on output is set to be made. Representatives would then meet with major non-OPEC producers such as Russia a few days later to get their input. Analysts have warned a failure to extend the cuts would sink oil prices given investors have expanded their net-long positions with the assumption of an extension.
"Their expectations are now likely to face a renewed test," said Commerzbank, noting that top energy watchdogs such as the International Energy Agency recently lowered their forecast for global oil-demand growth while raising projections of non-OPEC supplies.
Moreover, the U.S. Energy Information Administration last week said daily crude production there could rise to 9.9 million barrelsa day in 2018, versus March's prediction of 9.7 million. Output last year averaged 8.9 million and is seen by the agency coming in at 9.2 million barrels a day this year.
Output has risen for eight straight weeks; the latest data will be out Wednesday as part of the EIA's closely watched weekly inventory data. According to The Wall Street Journal's survey of analysts, the average estimate is for a slight pullback in crude stockpiles last week and a bigger drop in gasoline inventories. However, the American Institute of Petroleum late Tuesday said its data showed an increase in gas supplies for last week.
As such, Nymex May gasoline futures have fallen 0.9% from the New York settlement to $1.6961 a gallon. May diesel was recently down 0.2% at $1.6180 and ICE gasoil eased 0.5% to $489 a metric ton.
Write to Jenny W. Hsu at firstname.lastname@example.org
(END) Dow Jones Newswires
April 18, 2017 23:39 ET (03:39 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.