Oil prices fell on Wednesday after data from an industry group showed a larger-than-expected build in US crude inventories last week, fanning worries over global oversupply, even as a slightly weaker dollar provided some support.
Brent crude for December delivery had fallen 16 cents to $48.55 a barrel by 0144 GMT after settling up 10 cents in the previous session.
US crude for December delivery dropped 36 cents at $45.93 a barrel after settling up one cent at $46.29. The November contract, which expired on Tuesday, finished down 34 cents at $45.55 per barrel.
“Concerns over the potential for a further build (in US crude stocks) in official data (were driving prices lower)”, said Michael McCarthy, chief market strategist at Sydney’s CMC Markets.
“The low volumes and market moves are reflecting that,” he said.
Industry data showed US commercial crude stocks climbed by a larger-than-expected 7.1 million barrels to 473 million in the week to Oct. 16, the American Petroleum Institute said on Tuesday. Analysts had expected a 3.9 million barrels increase.
The US Energy Information Administration is due to release official inventory data later on Wednesday, which is expected to show a build in crude stocks for the fourth straight week.
It was a surprise crude stocks had continued to climb even as the number of rigs had fallen, from about 800 sixth months ago to 600 now, McCarthy said.
“Clearly this is not helping the oil bulls,” he said.
Investors are also eyeing the outcome of an oil experts meeting later on Wednesday involving members of the Organisation of the Petroleum Exporting Countries and non-OPEC oil producers.
With ex-Soviet oil producers, including Russia and Azerbaijan, unlikely to bow to pressure to reduce output in an effort to lift prices there is little chance of a deal between the two sides, industry experts said.
The dollar index slipped against a basket of currencies which helped support oil prices.
A weaker dollar makes dollar-denominated commodities, including oil, cheaper for buyers using other currencies.