Oil prices stem fall on inventory draw at Cushing hub

Oil prices edged up from multi-week lows in thin Asian trade on Wednesday after an industry group reported that stocks fell at the Cushing storage hub in Oklahoma, delivery point for West Texas Intermediate oil contracts.

Price gains were limited as a supply glut persists even after U.S. production cuts. Investors are awaiting official inventory data due out later on Wednesday that is expected to show further stockpiling.

Brent crude, the global benchmark, was up 3 cents at $46.84 a barrel. It fell to $46.41 on Tuesday the lowest since the middle of September.

 

U.S. crude for December delivery was up 4 cents at $43.24 a barrel at 0308 GMT after earlier rising as high as $43.48. The contract touched $42.58 on Tuesday, the lowest since late August.

“The global glut is still very much weighing on investors minds at the moment,” said Ben le Brun, a market analyst at OptionsXpress in Sydney.

“Some of the major corporates such as BP are talking about sluggish prices through 2016,” he added.

BP (BP.L) on Tuesday announced further spending cuts and more asset sales over the coming years to tackle an extended period of low oil prices and help pay for its $54 billion U.S. oil spill settlement.

Crude stocks at the Cushing delivery hub fell by 748,000 barrels, data from the industry group, the American Petroleum Institute, showed late on Tuesday.

Overall U.S. crude stocks rose by 4.1 million barrels in the week to Oct. 23 to 477.1 million, the API data showed.

The API estimate was more than the 3.4-million-barrel rise that analysts surveyed in a Reuters poll had said they expected.

The U.S. Department of Energy’s Energy Information Administration will release its official crude oil and oil product data at 1430 GMT on Wednesday.

Investors are also awaiting a statement by the U.S. Federal Reserve later on Wednesday following the end of its two-day policy meeting.

The Fed is expected to keep interest rates unchanged, according to a survey of economists by Reuters.

Source: Reuters