Oil below $37 as US inventory rise counters output freeze plan
Oil edged further below $37 a barrel on Wednesday as an industry report showing a rise in U.S. crude stockpiles to a new record countered support from producer efforts to tackle a supply glut.
US crude inventories jumped by 9.9 million barrels last week, the American Petroleum Institute (API) said on Tuesday, much more than the 3.6-millionbarrel increase analysts had forecast.
Global benchmark Brent crude was down 27 cents at $36.54 a barrel by 0946 GMT. On Tuesday, it reached $37.25, the highest in almost two months. U.S. crude, also known as WTI, was down 66 cents at $33.74. "The strong inventory build reported by the API would explain why WTI is falling more than Brent," said Carsten Fritsch, analyst at Commerzbank in Frankfurt.
Traders will look closely at the U.S. government's weekly supply data on Wednesday for confirmation of the inventory build. The Energy Information Administration figures are due at 10:30 a.m. EST (1530 GMT).
Brent has risen 35 percent from a 12year low of $27.10 hit on Jan. 20, adding to expectations that further drops may not be on the cards. An analyst at the International Energy Agency said on Tuesday prices appeared to have bottomed.
Crude has collapsed from more than $100 in mid-2014, pressured by excess supply and a decision by the Organization of the Petroleum Exporting Countries to abandon its traditional role of cutting production by itself to boost prices.