LONDON: Oil prices extended losses on Wednesday after falling by as much as 3 percent in the previous session amid concerns that rebalancing the global oil market will take longer than originally envisaged.
Prices had been supported earlier in the session by data from the American Petroleum Institute (API) which showed a crude build of 1.4 million barrels for the week ended Sept. 9, smaller than the 3.8-million-barrel rise expected by analysts.
The US government will issue official inventory data later on Wednesday.
Brent crude futures were trading down 33 cents at $46.77 per barrel at 1244 GMT.
US West Texas Intermediate futures were down 26 cents at $44.64 a barrel.
“Long suffering oil bulls will now turn nervously to the US EIA’s commercial crude inventory numbers,” OANDA senior market analyst Jeffrey Halley said.
“It was an unexpected undershoot in these numbers last week that set off the rally in crude last week.”
Crude prices tumbled on Tuesday after the International Energy Agency (IEA) said slowing oil demand growth amid growing inventories and supplies could signal that the market will be oversupplied at least through the first half of 2017.
Commerzbank said in a note that the delay in rebalancing is largely due to a rise in production from members of the Organization of the Petroleum Exporting Countries and that the market would be balanced already if OPEC had maintained its production at May’s levels.
“Rather than talking about capping oil production as it was planning to do at the end of September, OPEC would be better advised to think about reversing the production growth of recent months,” Commerzbank analyst Carsten Fritsch said.
OPEC members are due to meet informally in Algeria this month on the sidelines of the International Energy Forum.Russia is also expected to attend the IEF.
The chairman of Libya’s National Oil Corporation visited the port of Zueitina on Wednesday and said he would work to lift force majeure there, according to the head of a guard force in control of the terminal.
NOC Chairman Mustafa Sanalla said Libyan production could be raised to 600,000 barrels per day (bpd) from about 290,000 bpd within a month.