SINGAPORE: Oil prices edged lower in Asia on Wednesday on expectations the latest US stockpiles report will show a further surge in crude reserves, worsening a global supply glut, analysts said.
US benchmark West Texas Intermediate fell 15 cents to $56.91 while Brent crude slipped 16 cents to $64.48 in afternoon trade.
The Department of Energy (DoE) will release its weekly report later Wednesday.
Crude reserves are expected to have increased by 2.9 million barrels in the week to April 24, according to a Bloomberg News survey of analysts.
“The market is broadly waiting on the US inventories numbers as the weekly report has been a key drive to changes in crude prices,” Ric Spooner, chief market analyst with CMC Markets in Sydney, told Agence France-Presse.
Inventories have been expanding for the past 15 weeks and are currently at the highest level on record, contributing to a global glut that has been the main factor for a price collapse of more than 50 percent between June and January.
Spooner said investors will be closely watching the state of US crude production, which is also included in the DoE’s weekly report.
US output has dipped slightly in three of the past four weeks, but still hovers around nine million barrels a day.
Dealers are hoping a slowdown in US shale production could alleviate the global oversupply.
“If the production numbers continue to slip or plateau, the market will be more optimistic over the coming days,” Spooner said. AFP