Crude Oil Rebounds after API Report Shows Smaller-Than-Expected Build

"However, the opposite now seems to be happening", it said.

EIA made a series of gloomy predictions on demand growth that pointed that the balance in the market will be reached later than expected. Recently, news emerged of a settlement between OPEC member countries and Russian Federation on production freeze; however, no confirmation was reported.

"As a result, supply will continue to outpace demand at least through the first half of next year", the IEA said.

"I am expecting an across-the-board build with a large build in crude oil as imports recover after the tropical storm in the Gulf", said Dominick Chirichella, senior partner at the Energy Management Institute in NY, who predicted an increase of 6.6 million barrels in the latest week. The IEA also trimmed its demand growth forecast for 2017 by 200,000 barrels per day, to 97.3 mb/d.

"We've seen a lot of bearish news this week: Libya, Nigeria, skeptical monthly reports from the IEA and OPEC and large stockbuilding in the USA, so weak fundamentals are weighing on the market", said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

The post Oil prices fall on United States report appeared first on Punch Newspapers. Rising production from OPEC has offset the effect of declining supplies elsewhere, maintaining the oversupply, the IEA said. "We have never seen [a three-year decline] in history", he said. The US had held the spot since April 2014. High-cost OPEC producers have been hit particularly hard.

Meanwhile, news that Nigeria and Libya are now in a position to ramp up oil exports has also provided a growing headwind for oil prices. OPEC revised its forecast for non-OPEC supply upward by 180,000 b/d in 2017. Brent, the global benchmark, fell $1.25, or 2.7%, to $45.85 a barrel on ICE Futures Europe.

"I think the oil market clearly overreacted to the products build data we had yesterday and that's indicative of today's price rebound", said Jay Hatfield, portfolio manager at New York-based InfraCap MLP, which invests in equities of energy partnerships.

Oil fell on Tuesday following a series of gloomy predictions on demand growth that suggested the global overhang of unused inventories may persist for much longer than investors anticipate and temper any pick-up in price.

The organisation reversed its previous projection that stubborn global oversupply would be soaked up by demand in the latter part of 2016.

"The oil price has to stay muted for now in order to avoid activation of more shale oil rigs".

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