Oil prices were down slightly on Thursday as the market braced for U.S. government data likely to show the first crude inventory build in six weeks, with record Chinese imports of crude limiting losses.
Also weighing on the market was data from Wednesday showing OPEC output at record highs despite the producer group’s pledges to cut production soon to rein in a global crude glut.
Brent crude LCOc1 was down 4 cents at $51.77 per barrel by 9:16 a.m. EDT (1316 GMT), after dropping as much as 48 cents earlier.
U.S. West Texas Intermediate (WTI) crude shed 5 cents to $50.13. It fell 56 cents earlier at the session low.
The American Petroleum Institute (API), a trade group, reported on Wednesday that U.S. crude inventories rose by 2.7 million barrels in the week to Oct. 7.
API’s data indicated that the U.S. government’s Energy Information Administration (EIA) was also likely to report a crude build for last week, the first in six weeks, in data due at 11:00 a.m. EDT (1500 GMT). Analysts polled by Reuters forecast that the EIA will cite a build of 300,000 barrels.
“I think the market is reacting appropriately” awaiting the EIA data, said Scott Shelton, energy futures broker with ICAP in Durham, North Carolina. “Crude builds can be seasonal at this time of the year while products generally draw.”
China’s September crude imports rose 18 percent from a year earlier to 33.06 million tonnes, or 8.04 million barrels per day (bpd) on daily basis, customs data showed, compared with the U.S. four-week average of 7.98 million bpd.
The Organization of the Petroleum Exporting Countries on Wednesday reported its oil production hit an eight-year high of 33.39 million bpd in September.
It also raised its forecast for 2017 non-OPEC supply growth, pointing to a larger surplus next year. OPEC’s data runs contrast to its pledge of the past two weeks that it intends to cut some 700,000 bpd from an estimated global glut of 1.0-1.5 million bpd that forced oil prices down from mid-2014 highs above $100 a barrel.
Major oil industry executives and investors at a Reuters Summit in London differed in their views on the price direction for oil in coming months based on OPEC’s likely action.
“In 2014, the big opportunity was in prices going down and now the big opportunity is in prices going up. That’s the way I see it,” said Pierre Andurand, manager of the $1.4 billion Andurand Capital fund in London, which has forecast $60 prices by the year-end.