Oil prices fell on Wednesday after data from an industry group showed a larger-than-expected build in U.S. crude inventories last week, fanning worries over global oversupply, even as a slightly weaker dollar provided some support.
Brent crude for December delivery had fallen 30 cents to $48.41 a barrel by 0645 GMT after settling up 10 cents in the previous session.
U.S. crude for December delivery dropped 44 cents at $45.85 a barrel after settling up one cent at $46.29. The November contract, which expired on Tuesday, finished down 34 cents at $45.55 per barrel.
Industry data showed U.S. commercial crude stocks climbed by a larger-than-expected 7.1 million barrels to 473 million barrels in the week to Oct. 16, the American Petroleum Institute said on Tuesday. Analysts had expected a 3.9 million barrels increase.
The U.S. Energy Information Administration is due to release official inventory data later on Wednesday, which is expected to show a build in crude stocks for a fourth straight week.
The increase was due to low refinery utilization which should continue as a result of continuing refinery maintenance, Singapore’s Phillip Futures said in a note on Wednesday.
“The more interesting figure to focus on would be US crude oil production which should continue to drop. Another drop this week would likely cause production to drop below 9 million barrels per day (bpd) which would be taken as a bullish sign,” the note said.
Stagnating rig productivity shows U.S. shale oil producers are running out of tricks to pump more with less, pointing to a slide in output that should help rebalance global markets, commentators said.
China’s crude imports will continue to grow over the next five years, from 6.6 million bpd in 2015 to 7.7 million bpd in 2020, an average of 3.2 percent a year, boosting demand for oil imports, BMI Research said in a report on Wednesday.
China’s implied oil demand fell slightly in September to 10.13 million bpd, down 0.1 percent from a year ago, according to Reuters calculations based on preliminary government data.
Investors are also eyeing the outcome of a meeting of oil experts later on Wednesday involving members of the Organisation of the Petroleum Exporting Countries and non-OPEC oil producers.
With ex-Soviet oil producers, including Russia and Azerbaijan, unlikely to bow to pressure to reduce output in an effort to lift prices there is little chance of a deal between the two sides, industry experts said.