SINGAPORE May 17 Oil prices fell 1 percent on
Wednesday after data showed an increase in U.S. crude
inventories, stoking concerns that markets remain oversupplied
despite efforts by top producers Saudi Arabia and Russia to cut
Brent crude futures were down 53 cents, or 1
percent, from their last close at $51.13 per barrel at 0028 GMT.
U.S. West Texas Intermediate (WTI) crude futures were
at $48.10, down 57 cents, or 1.1 percent, from their last
U.S. crude oil inventories rose by 882,000 barrels in the
week ending May 12 to 523.4 million, compared with analyst
expectations for a decrease of 2.4 million barrels, data from
industry group the American Petroleum Institute showed on
"The rally in crude oil prices that started after news that
OPEC was ready to prolong its production cut agreement stalled
overnight, as the market awaits evidence of rebalancing," ANZ
bank said on Wednesday.
The fall in prices came just days after Saudi Arabia and
Russia said on Monday that they agreed the need for a 1.8
million barrels per day (bpd) crude supply cut by the
Organization of the Petroleum Exporting Countries (OPEC) and
some other producers including Russia to be extended for nine
months, until the end of March 2018.
The extension of the supply cuts, which started in January
and were supposed to end in June, are seen as necessary by some
as they have not so far significantly tightened the market or
propped up prices.
The International Energy Agency (IEA) said on Tuesday that
commercial oil inventories in industrialised countries rose by
24.1 million barrels in the first quarter of the year, a time
during which the OPEC-led production cut was already in place.
Despite this, analysts said that an extension of the supply
cut was important.
"The agreement by OPEC to extend cuts into 2018 is
critical," said AB Bernstein in a note.
"OPEC cuts will nevertheless lead to accelerated inventory
drawdowns in 2H17, but the return to normalized inventories will
... drag into 2018," it added.
(Reporting by Henning Gloystein; Editing by Joseph Radford)