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Oil on the back foot ahead of U.S. supply update

Published 09/08/2017, 08:36
Updated 09/08/2017, 09:06
© Reuters.  Oil prices edge lower ahead of U.S. supply update
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Investing.com - Oil prices edged lower on Wednesday, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.

The U.S. West Texas Intermediate crude September contract was at $49.12 a barrel by 3:35AM ET (0735GMT), down 5 cents, or around 0.1%.

Elsewhere, Brent oil for October delivery on the ICE Futures Exchange in London shed 12 cents, or 0.2%, to $52.02 a barrel.

Oil prices fell for a second straight session in volatile trade on Tuesday.

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 2.7 million barrels at the end of last week, while gasoline supplies are seen decreasing by about 1.4 million barrels and distillates are forecast to fall about 131,000 barrels.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 7.89 million barrels in the week ended August 4.

The API report also showed a gain of 1.5 million barrels in gasoline stocks, while distillate stocks fell by 157,000 barrels.

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

Meanwhile, officials from a joint OPEC and non-OPEC technical committee said on Tuesday that they expect greater compliance with their output-cutting pact.

According to recent calculations, compliance fell to 86% in July, the lowest level since January.

OPEC and 10 producers outside the cartel, including Russia, agreed since the start of the year to slash 1.8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market.

However, so far, the deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale output.

Elsewhere on Nymex, gasoline futures for September was little changed at $1.602 a gallon, while September heating oil ticked down 0.8 cents to $1.620 a gallon.

Natural gas futures for September delivery shed half a cent to $2.818 per million British thermal units.

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