Oil struggles ahead of U.S. supply update

Investing.com - Oil prices were lower in European trade on Wednesday, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products later in the global day.

The U.S. West Texas Intermediate crude August contract was at $43.91 a barrel by 3:35AM ET (0735GMT), down 32 cents, or around 0.7%. It touched its highest since June 19 at $44.44 a day earlier.

Elsewhere, Brent oil for September delivery on the ICE Futures Exchange in London shed 23 cents, or about 0.5%, to $46.69 a barrel, after hitting a more than one-week high of $47.30 in the prior session.

Crude prices posted sharp gains on Tuesday, with the commodity logging its fourth winning session in a row.

The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (1430GMT).

Analysts expect crude oil inventories dropped by around 2.5 million barrels at the end of last week, while gasoline supplies are seen decreasing by 583,000 barrels and distillates are forecast to gain about 453,000 barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 851,000 barrels in the week ended June 23.

The API report also showed a gain of 1.35 million barrels in gasoline stocks, while distillate stocks rose by 678,000 barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

Oil prices have been under pressure in recent weeks as concern over rising U.S. shale output offset production cuts by OPEC and non-OPEC members.

U.S. drillers last week added rigs for the 23rd week in a row, according to data from energy services company Baker Hughes, implying that further gains in domestic production are ahead.

The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

Elsewhere on Nymex, gasoline futures for August held steady at $1.437 a gallon, while August heating oil dipped 0.9 cents to $1.409 a gallon.

Natural gas futures for August delivery tacked on 0.6 cents to $3.070 per million British thermal units.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App