Oil prices fell on Wednesday as a global supply overhang weighed on markets, while talk of a potential producer meeting to discuss propping up prices was largely expected by analysts to have no impact on supplies.
U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $42.43 per barrel at 0657 GMT, down 34 cents from their last settlement, or 0.79 percent.
International Brent crude futures LCOc1 were at $44.62 per barrel, down 36 cents, or 0.8 percent.
Traders said that markets were being weighed down by an ongoing supply overhang in crude and refined fuel products, while a suggested meeting by oil producers was unlikely to result in a significant market tightening.
“Oil eased lower as another round of proposed production freeze talks by OPEC failed to excite investors. An upgrade in U.S. oil production forecasts by EIA also weighed on sentiment. EIA is now expecting U.S. output to reach 8.31 million barrels per day in 2017, up from its forecast of 8.2 million barrels per day in July,” ANZ Bank said on Wednesday.
Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), is trying to drum up support for a producer meeting to decide measures that would buoy oil prices.
“We are actively promoting a meeting of producers, which we estimate could take place in the coming weeks, so that OPEC and non-OPEC countries can sit down to see what the scenario for the winter looks like,” its oil minister Eulogio del Pino said this week.
The last time producers met to discuss measure to tighten oil supplies and prop up prices, in April, OPEC members were not able to agree on any measures.
Analysts said they did not expect more success from a potential future meeting.
“Renewed attempts at verbal intervention by OPEC will help bolster oil market sentiment, although the group will struggle to rebuild its role as a backstop to Brent,” said oil analysts at BMI Research in a note to clients.
In the refining sector, Singapore’s benchmark refining profits dropped to two-year lows on Wednesday, in the latest sign that the industry is pumping out too much fuel for the market to absorb, leaving storage tanks brimming with unsold fuels.
Asian benchmark Singapore refinery margins DUB-SIN-REF fell to $2.94 per barrel on Wednesday, down over 70 percent since January and its lowest level since August 2014.
The glut was triggered by oversupply of gasoline GL92-SIN-CRK and diesel GOSGCKMc1, but it has since spread to light distillates like naphtha NAF-SIN-CRK.