Oil loses ground on increase in US crude and fuel stocks

Oil prices fell in early Asian trade on Wednesday as industry data showed a pile- up in both crude and fuel inventories in the US, a sign of weak demand, and cautious supply expectations emerged ahead of an Opec+ policy meeting in June.

Brent crude oil futures fell 30c, or 0.36percent , to $ 82.86 a barrel by 3.48am GMT. US West Texas Intermediate crude futures fell 25c, or 0.32percent , to $ 78.13 a barrel. Both benchmarks fell marginally in the previous session on signs of easing supply tightness and weaker global oil demand from an Energy Information Administration ( EIA) forecast report on Tuesday.

US crude stocks rose by 509,000 barrels in the week ended May 3, market sources said citing American Petroleum Institute ( API) figures. Petrol and distillate fuel inventories also rose, they said.

“API numbers released overnight were moderately bearish due to stock builds in both crude and products.... Concern over weaker- than- usual US gasoline [ petrol] demand and this stock- build have weighed on the prompt RBOB gasoline crack,” said ING analysts in a client note.

O cial US government data on stockpiles is due at 2.30pm GMT. Analysts polled by Reuters expect US crude oil inventories to have fallen by about 1.1- million barrels last week. Cautious expectations on supply cuts from oil cartel Opec and associates ( Opec+) ahead of a June 1 policy meeting also weighed on markets.

“Oil prices have come under further pressure as noise around Opec+ production policy grows.... Expectations are that members will extend their additional voluntary supply cuts beyond the second quarter of this year,” said ING analysts. Reuters