Oil prices, on Wednesday, January 25, slumped on Wednesday after builds in U.S. inventories reinforced expectations that increasing shale output this year would reduce the impact of production cuts.
Benchmark Brent crude for March LCOH7, +0.16% was down 30 cents, or 0.3%, to $55.14 a barrel. U.S. light crude CLH7, +0.38% was down 31 cents, or 0.6%, to $52.87 a barrel.
Weekly inventory data from the American Petroleum Institute late on Tuesday showed U.S. crude, gasoline and diesel stocks rose more than expected last week.
The U.S. government’s Energy Information Administration late on Tuesday showed U.S. crude, gasoline and diesel stocks rose more than expected last week.
The U.S. government’s Energy Information Administration reports its own data at 10:30 a.m. Eastern Time and traders will look to see whether the official figures confirm the industry’s numbers.
“The API report was bearish,” said Tamas Varga, senior analyst at London brokerage PVM Oil Associates. “Expect more pressure on prices if the EIA shows similar numbers.”
Oil prices have found support in recent weeks from plans by the Organization of the Petroleum Exporting Countries and other producers to reduce output.
Around 1.5 million barrels per day has already been taken out of the market from about 1.8 million barrels per day agreed by oil majors starting on Jan. 1, energy ministers said on Sunday, as producers look to reduce oversupply, MarketWatch reports.
