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WTI oil futures trade near 2-month low ahead of inventory data

Published 28/10/2015, 07:56 pm
© Reuters.  U.S. crude oil futures trade near 2-month low ahead of weekly supply report
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Investing.com - West Texas Intermediate oil futures held near a two-month low on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected last week.

Crude oil for delivery in December on the New York Mercantile Exchange inched up 21 cents, or 0.5%, to trade at $43.42 a barrel during European morning hours.

On Tuesday, Nymex crude prices lost 78 cents, or 1.77%. It earlier fell to $42.58, a level not seen since August 28, as oversupply concerns remained a factor for oil markets.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET Wednesday. The data was expected to show that crude inventories rose by 3.4 million barrels last week, while gasoline stockpiles were forecast to decline by 0.8 million barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 4.1 million barrels in the week ended October 23, above expectations for a gain of 3.0 million.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for December delivery tacked on 17 cents, or 0.35%, to trade at $46.98 a barrel. A day earlier, Brent prices fell to $46.41, the lowest since September 15, as ongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longer than anticipated.

The oil market has been volatile in recent months amid uncertainty about how quickly the global glut of crude is set to shrink. Despite this tighter outlook for North America, output remains robust in other countries.

According to industry research group Baker Hughes (N:BHI), the number of rigs drilling for oil in the U.S. decreased by one last week to 594, the eighth straight weekly decline.

However, Saudi Arabia and other Gulf OPEC members have indicated in recent months that they will continue to stick to their policy of defending market share by keeping production high.

Oil prices have lost nearly 60% since last summer as lingering concerns over a glut in world markets drove down prices.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.56 a barrel, compared to $3.61 by close of trade on Tuesday.

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