Crude prices drifted weaker on Tuesday in Asia with the latest weekly estimates on crude and refined product inventories to take center stage.
On the New York Mercantile Exchange crude futures for June delivery fell 0.29% to $48.71 a barrel, while on London’s Intercontinental Exchange, Brent last traded at $51.44.
The American Petroleum Institute (API) will report its estimates of crude and refined product stocks after the market close in the U.s. on Tuesday to be followed by the Energy Information Administration with official figures on Wednesday. The two sets of figures often diverge and have in the past two weeks whipsawed the market. In the Asian day, the Caixin manufacturing index for April is due, a closely watching leading indicator for demand prospects in the world’s second largest crude importer.
Overnight, crude futures settled lower on Monday, after Libya ramped up production while fears resurfaced that rising U.S. production would offset an OPEC-led deal to curb the global glut in supply.
Oil prices added to losses sustained in April, as Libya fuelled oversupply concerns, after production rebounded to the highest rate since 2014, Mustafa Sanalla, chairman of the National Oil Corp. said.
Libya’s crude production rebounded as the country’s two key oilfields resumed output, after protests that had blocked pipelines came to an end. Meanwhile rising U.S. production jitters continued into the month of May, after Oilfield services firm Baker Hughes reported its weekly U.S. rig count rose by 9 to 697.
Crude output, which hit its highest rate since April 2015, remained one of the key factors contributing to the recent slide in oil prices as investors feared that rising U.S. production would offset an OPEC-led deal to curb the global glut in supply.
Elsewhere, comments from Iran’s oil minister, Bijan Zangeneh, failed to lift sentiment. Mr Zengeneh said on Saturday that OPEC and non-OPEC producers had given positive signals for an extension of output cuts.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd). The deal to cut supply came into effect in January this year for a period of six-months until June.
OPEC will decide at talks on May 25 whether to extend production cuts beyond June.
