NEW YORK: Oil prices fell below $50 a barrel on Wednesday, with Brent dropping to a near one-month low ahead of official data that could show a US crude inventory build amid scepticism over OPEC’s planned output cut.
The US Energy Information Administration will report crude stockpiles and other oil supply-demand data for last week at 10:30 a.m.
In a preliminary inventory report on Tuesday, trade group American Petroleum Institute (API) said US crude stocks rose 4.8 million barrels in the week to Oct. 21, nearly three times a forecast by analysts polled by Reuters.
The data would buck the trend of unexpected draws seen in US crude stocks in six of the past seven weeks.
Crude stocks generally rise at this time of year as refineries go into maintenance. Refinery utilization in the week to Oct. 14 was down to 88 percent from nearly 94 percent in early September.
“We do think that trend will break,” said Tariq Zahir, oil trader and fund manager at Tyche Capital Advisors in Long Island, New York. “We’re still very well supplied with crude oil.”
Brent crude futures were down $1.05, or 2.1 percent, at $49.74 a barrel by 9:32 a.m. (1332 GMT) after touching a session low of $49.70, the weakest since Sept. 30.
US crude futures fell 95 cents to $49.01 after earlier dropping to $48.93, a low since Oct. 4.
Oil prices were also depressed by producers’ verbal jockeying over planned output cuts by the Organization of the Petroleum Exporting Countries.
Iraq, the second largest member of OPEC, has said it does not want to join in with a proposed production cut that the group has said it would approve at a regular meeting in Vienna next month.
Traders and investors are growing less confident about OPEC’s chances of securing an effective agreement to curb output as more members say they want to be excluded from the deal.
Iran, Nigeria and Libya are already expected to be exempted, possibly along with Venezuela. Indonesia’s state oil producer said on Tuesday it was targeting a 42 percent increase in output next year.
Unless top world producer Russia, which does not belong to OPEC, joins in, the onus of a potential cut would fall on Arab producers in the Middle East comprising of Saudi Arabia, Kuwait and the United Arab Emirates.