12:40 PM March 2nd, 2016
SINGAPORE,
Singapore—Oil prices fell in Asian on Wednesday as traders awaited the release
of US crude inventory data, which are expected to show a further rise in
stockpiles.
After
closing higher Tuesday on fresh Russian calls for a production freeze to reduce
the global supply glut, US benchmark West Texas Intermediate for delivery in
April was 33 cents (0.96 percent) down at $34.07 around 0300 GMT in New York.
Brent
North Sea crude for May delivery was 12 cents (0.33 percent) lower at $36.69 in
London.
“US
crude oil inventories increasing is almost becoming a norm. Inventories are
already at a historic high” and markets are taking a nonchalant stance towards
a continued inch upwards, said Daniel Ang, investment analyst at Phillip
Futures in Singapore.
“US
production, on the other hand, is slightly more interesting as it is finally
starting to show corrections. We highly expect to see US oil production drop a
lot more now that prices are in the $30 region, which could result in the
easing of global oil supply,” he added in a note.
A
Bloomberg News survey ahead of Wednesday’s Energy Information Administration
(EIA) report showed that US crude stockpiles probably increased 3.4 million
barrels from an 86-year high last week.
The
EIA is projected to report that supplies of gasoline and distillate fuel, a
category that includes diesel and heating oil, dropped, Bloomberg added.
Oil
prices had risen Tuesday on increasing optimism of an output freeze to
shore up the market as Russia said domestic oil groups supported the proposal.
Opening
a meeting with Russian oil group chiefs, President Vladimir Putin said Energy
Minister Alexander Novak had led discussions on forging a freeze agreement between
producer countries.
He
said the idea was to “fix Russia’s 2016 production level at that of January,”
which was a post-Soviet record of 10.8 million barrels per day on average.
The
market gained a lift in the latter half of February when OPEC kingpin Saudi
Arabia and non-OPEC member Russia agreed to freeze output to January levels, if
other major producers followed suit.
But
disappointment that there was no output cut, and skepticism that such a freeze
could be agreed, has contributed to recent market volatility.
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