Sydney: Oil prices fell nearly 1 per cent on Wednesday as bullish output forecasts by two big US producers and a build in US crude stockpiles outweighed ongoing OPEC-led efforts to rein in crude production.
International Brent futures were down 55 cents, or 0.8 percent, at USD 65.31 a barrel at 0209 GMT.
US West Texas Intermediate (WTI) crude futures were at USD 56.05 per barrel, down 51 cents, or 0.9 per cent.
“Oil is likely to play ‘tug of war’ here, with production cut promises to be countered with rising output from the US,” said Edward Moya, senior market analyst, OANDA.
Chevron Corp and Exxon Mobil Corp released duelling Permian Basin projections on Tuesday pointing to big increases in shale oil production.
If realised, the increases would cement the rivals as the dominant players in the West Texas and New Mexico field, with one-third of Permian production potentially under their control within five years.
Data from the American Petroleum Institute (API), an industry group, also showed larger-than-expected US crude stockpiles.
US crude inventories rose by 7.3 million barrels in the week ending March 1 to 451.5 million, compared with analysts’ expectations for an increase of 1.2 million barrels, API said. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.1 million barrels.
“An increase in US crude inventories is weighing on oil prices and in the long term, concerns over rising oil production in the Permian region is keeping a lid on prices,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
Official data from the US Department of Energy’s Energy Information Administration is due later on Wednesday.
The rise in North American production undermines supply cut efforts led by the Organization of Petroleum Exporting Countries (OPEC).
OPEC and its allies pledged to curb output by 1.2 million barrels per day, and they are likely to push back their decision whether or not to extend the output cut agreement to June from April, according to sources.
Meanwhile, the market is looking for further signs that the United States and China are making progress in talks to resolve their trade conflict.
US Secretary of State Mike Pompeo said President Donald Trump would reject any trade deal that is not perfect, but added the White House would keep working on an agreement....