Oil drops further on US report

 09 Mar 2017 - 0:51


London: Oil dropped further below $56 a barrel yesteday after an industry report pointed to a large rise in crude inventories in the United States, renewing oversupply concerns despite Opec output curbs.
US crude inventories rose by a more-than-forecast 11.6 million barrels last week, data from industry group the American Petroleum Institute (API) showed on Tuesday, ahead of the government's supply report due later on Wednesday.
Brent crude, the international benchmark, was down 29 cents at $55.63 a barrel at 0950 GMT. US crude fell 40 cents to $52.74. If the API report of an inventory rise is confirmed by the
US Energy Information Administration report at 1530 GMT, it would be the ninth straight week of increases. Analysts had forecast a 1.9 million-barrel inventory rise.
"All eyes are on the EIA numbers," said Jeffrey Halley, senior market strategist at Oanda in Singapore. "A big washout of that will see oil test technical support levels."
US crude supplies have continued to rise despite a supply cut that started on Jan. 1 by the Organization of the Petroleum Exporting Countries plus Russia and other non-members. Data has suggested high compliance with the deal.
Total output reductions have exceeded 1.5 million barrels per day, Saudi Energy Minister Khalid al-Falih said on Tuesday, out of the almost 1.8 million bpd pledged. He also said the results had exceeded the low market expectations.