Oil futures fell in Asian trade on Wednesday after industry data pointed to a potential ninth straight week of inventory builds, renewing concerns about an oversupply of oil despite output curbs by OPEC and non-OPEC members.
As of 0740 GMT, brent futures were down 23 cents, or 0.4 percent, at $55.69, after settling down 0.2 percent in the previous session.
U.S. West Texas Intermediate (WTI) crude fell 29 cents, or 0.6 percent, to $52.85 a barrel, after ending the previous session down 0.1 percent.
“Oil is range-bound. If prices dip below $50 a barrel, OPEC will cut more; if it goes above $55 the U.S. will produce more,” said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.
U.S. crude stocks rose by 11.6 million barrels last week, more than five times analysts’ estimates, according to industry group, the American Petroleum Institute.
If the figures are confirmed later on Wednesday by official data from the U.S. Department of Energy’s Energy Information Administration (EIA) it would be the ninth straight week of inventory builds.
Analysts have forecast a 1.7 million barrel inventory build.
“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.”
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Oil prices are facing headwinds from a likely U.S. Fed interest rate hike next week, a strong dollar, increasing inventory builds to record levels and rising U.S. shale oil production, he said.
“The planets seem to be aligning for a bit of a washout of long positions. I think it’s getting time for a bit of a correction in oil prices,” Halley said.
The API stocks data came as the EIA on Tuesday cut its 2017 world oil demand growth forecast by 110,000 barrels per day to 1.51 million bpd.
At the same time, members of an OPEC-led production agreement said on Tuesday total output reductions are more than 1.5 million barrels per day and are meeting their expectations.
China demand remains strong, with crude oil imports hitting the second-highest level on record in February on a daily basis at about 8.286 million barrels per day, up 3.5 percent on a year ago, customs data showed on Wednesday.