Crude
oil futures fell in early Asian trade on Wednesday after US
inventories showed a weekly buildup that far exceeded analyst
expectations. The American Petroleum Institute said late on Tuesday
that US crude oil stockpiles rose by 4.6 million barrels to 457.8
million barrels in the week to September 25. Analysts polled by
Reuters had expected an increase of only 102,000 barrels. Front-month
US crude had dropped 47 cents, or more than 1 percent, to USD 44.76 a
barrel by 0142 GMT. The contract settled Tuesday's trade at USD 45.23
a barrel, up 80 cents, or 1.8 percent, on the day. Brent crude, the
global oil benchmark, fell 35 cents to USD 47.88 a barrel. On
Tuesday, the contract rose 89 cents, or 1.9 percent, to USD 48.23.
The US government's Energy Information Administration (EIA) will
issue official weekly inventory data on Wednesday. Wednesday's
session may have added volatility due to the close of September and
third-quarter trading, according to some analysts. US crude is
heading for a 9-percent decline this month as the slump in
commodities continues amid deepening concerns over China's slowing
economic growth. Brent crude is on track to round out September with
a near 12-percent drop. Prices are unlikely to move substantially
higher in the near term because demand growth is easing and likely to
continue slowing into 2016, Rhidoy Rashid, oil analyst at consultancy
Energy Aspects, told Reuters Global Oil Forum. "We see demand
growth easing from 1.5 million bpd (barrels per day) to 1 million bpd
next year," Rashid said. He expects supplies to swing into a
year-on-year decline, but prices "need to be low for at least
the next six months - so in the USD 45-USD 55 range - to ensure a
proper rebalancing."
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