Crude oil eases for second day on rising U.S. inventories

A gas pump is seen hanging from the ceiling at a petrol station in Seoul. Image Source: Reuters

Crude oil futures slid for a second session on Thursday, moving away from a one-month high touched in the last session as rising U.S. inventories stoked worries about global oversupply.

Benchmark Brent crude futures slid 24 cents, or 0.4 percent, to $55.62 a barrel in early Asian trade. The market climbed to a one-month high of $56.65 on Wednesday before losing ground.

U.S. West Texas Intermediate crude futures were down 23 cents, or 0.4 percent, at $52.88 a barrel. They touched their highest since March 7 at $53.76 barrel in the last session.

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Traders focussed on preliminary U.S. production estimates in the weekly Energy Information Administration (EIA) report that suggested domestic output is still climbing. The report also showed stockpiles at the U.S. crude hub at Cushing, Oklahoma, rose 276,000 barrels in the week.

"U.S. oil production rose to the highest level in over a year, leaving oil prices weaker on the day after the U.S. EIA released its data," ANZ said in a note.

"U.S. production rose 36,000 barrels per day, the most since January 2016 and the Baker Hughes rig count of 672 is the highest since August 2015."

Brent and WTI have rallied in recent sessions after Saudi Arabia was reported to be pushing fellow OPEC members and some rivals to prolong supply cuts beyond June.

OPEC and other producers, including Russia, agreed late in November to curb output by around 1.8 million barrels per day in the first half of 2017 to rein in oversupply.

The U.S. data followed bullish reports from OPEC nations, which said they had cut March output beyond measures they had promised, according to figures the group published in a monthly report, as it sticks to an effort to clear a glut that has weighed on prices.

However, OPEC also raised its forecast for supplies from non-member countries in 2017 as higher prices encourage U.S. shale drillers to pump more, reducing demand for OPEC`s oil this year.

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