SINGAPORE Dec 14 Oil prices fell on Wednesday
following a reported rise in U.S. crude inventories and an
estimate that OPEC may have produced more crude in November than
previously thought, potentially undermining a planned output
U.S. West Texas Intermediate (WTI) crude oil futures
were down 69 cents, or 1.3 percent, to $52.29 a barrel at 0101
International Brent crude futures were down 62
cents, or 1.1 percent, at $55.10.
Traders said the price falls followed a report of surprise
increases in U.S. crude inventories. Markets were
also focused on an anticipated U.S. interest rate hike, likely
supporting the dollar and making dollar-traded fuel imports more
expensive for countries using other currencies at home.
"Momentum continues to wane in oil markets with both Brent
and WTI slightly lower overnight, following higher than expected
API inventory numbers in the United States ... (which) showed an
unexpectedly large increase of 4.7 million barrels," said
Jeffrey Halley, senior market analyst at OANDA brokerage in
"We expect Asia trading to have a slightly negative bias as
traders trim longs into the Federal Reserves' main event this
evening," he added, referring to the expected decision later on
Wednesday to hike U.S. interest rates.
Traders said prices were further depressed by a report from
the International Energy Agency (IEA) which said it believes
that Middle East producer club OPEC pumped about 34.2 million
barrels a day of crude in November, 500,000 bpd above OPEC's
official estimate, which was already a record.
If correct, that would undermine the effort by the
Organization of the Petroleum Exporting Countries (OPEC) and
non-OPEC producers like Russia to cut almost 1.8 million bpd of
production in a bid to end two years of oversupply and cheap
The agency said global oil supply rose to a record 98.2
million bpd in November, as OPEC production offset declines
This stands against expectations of 96.95 million bpd of
global oil demand for the fourth quarter of 2016.
Despite this, the IEA said that due to firm demand
increases, oil market could show a shortfall of 600,000 bpd
early next year if producers stick to their reduction plans.
(Reporting by Henning Gloystein; Editing by Richard Pullin)