Oil prices fell Wednesday on the back of rising U.S. inventories and signs of rapidly increasing crude production.
Brent crude LCOJ8, -0.35% , the global benchmark, was down 0.3% at $62.52 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures CLH8, -0.69% were trading down 0.7% at $58.79 a barrel.
The American Petroleum Institute, an industry group, released data late Tuesday showing a 3.9 million barrel increase in crude stockpiles for the week ended Feb. 9, along with a 4.6 million barrel rise in gasoline stocks and a 1.1 million barrel build in distillates.
Official inventory data is expected from the U.S. Energy Information Administration later Wednesday. U.S. crude inventory stocks are expected to have increased by 2.6 million barrels, on average, last week, according to a survey of analysts and traders conducted by The Wall Street Journal.
“Concerns are now rife that crude builds will be the norm over the next few weeks as the U.S. refinery turnaround season begins in earnest,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd., referring to the U.S. refinery maintenance period under way.
Inventories have begun to build again this month after weeks of declines. At the same time, oil traders are becoming increasingly concerned with the impact of burgeoning U.S. shale output on the market.
The International Energy Agency on Tuesday said crude production from countries outside the Organization of the Petroleum Exporting Countries—mainly the result of U.S. shale—would likely surpass global demand for oil this year, further pressuring prices.
U.S. output surpassed 10 million barrels a day late last year, surpassing Saudi Arabia and on course to rival Russia—the world’s two largest producers up to this point.
Oil prices, which had risen more than 50% in the second half of last year on the back of OPEC-led production cuts and geopolitical risk to supply, declined roughly 10% last week and have yet to recover those losses. The oil price rout was initially spurred by the correction in equities markets, and then sustained by rising U.S. supply.
“Prices have so far failed to recover after last week’s slump, which increases the risk of a further price slide,” according to analysts at Commerzbank.
Among refined products, Nymex reformulated gasoline blendstock — the benchmark gasoline contract — was down by 0.45%, at $1.83 a gallon. ICE gas oil, a benchmark for diesel fuel, changed hands at $545.75 a metric ton, roughly on par with the previous settlement.