Crude Oil Prices Under Pressure Ahead of API Supply Report

© Reuters. Oil slides ahead of API supply data

Investing.com - Oil prices were under pressure on Tuesday, as market players awaited weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest energy consumer.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2130GMT), amid forecasts for an oil-stock drop of around 2.8 million barrels.

Market sentiment was dampened after the International Energy Agency cut its global oil-demand forecasts, in contrast to a more bullish outlook from OPEC released a day earlier.

In a monthly report, the Paris-based agency cut its oil demand forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.

The IEA said warmer temperatures could cut consumption, while sharply rising production from outside OPEC might mean the global market tilts back into surplus in the first half of 2018.

U.S. West Texas Intermediate (WTI) crude futures shed 24 cents, or about 0.4%, to $56.52 a barrel by 8:40AM ET (1340GMT). It reached its best level since July 2015 at $57.92 last week.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., dipped 35 cents, or around 0.6%, to $62.81 a barrel. The global benchmark rallied to $64.65 last Wednesday, a level not seen since June 2015, but traders said the market had lost some momentum since then.

Oil prices finished mixed on Monday as the prospect of further rises in U.S. output undermined ongoing OPEC-led production cuts aimed at tightening the market.

Despite the cautious sentiment, crude prices stayed within sight of their strongest level in more than two years amid optimism that oil producing countries will agree to extend an output cut at their meeting at the end of this month.

Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.

In other energy trading Tuesday, gasoline futures slumped 1.5 cents, or 0.9%, to $1.772 a gallon, while heating oil declined 1.3 cents to $1.918 a gallon.

Natural gas futures lost 7.7 cents, or almost 2.5%, to $3.090 per million British thermal units, amid forecasts for less heating demand over the next two weeks.