Crude oil futures dropped on Thursday after official inventory reports indicated a larger-than-expected build in U.S. oil stocks.
Crude inventories in the United States rose by 5.3 million barrels in the week to Nov. 11, compared with expectations for an increase of 1.5 million barrels.
The climb in inventories was mainly due to higher imports that averaged 910,000 barrels per day (bpd), according to data released by the U.S. Energy Information Administration on Wednesday.
U.S. benchmark WTI crude CLc1 was down 25 cents, or 0.5 percent, at $45.34 a barrel at 0750 GMT. European ICE Brent LCOc1 crude futures fell 26 cents, or 0.6 percent, to $46.37 per barrel.
“Crude oil struggled to keep its head above water after the weekly EIA showed another large rise in inventories … Stocks of crude oil jumped 5.27 million barrels, much more than expected,” Australian bank ANZ said in a note.
Refining margins in all five U.S. regional petroleum districts fell in the week ended Nov. 11, Credit Suisse said in a weekly report on Wednesday.
“The U.S. EIA produced a higher-than-expected crude inventory figure, but this was subsumed into OPEC gossip,” said OANDA senior market analyst Jeffrey Halley. “We are well into headline trading season as Nov. 30 approaches.”
OPEC countries are ready to reach a “forceful” agreement on cutting oil output, Venezuelan President Nicolas Maduro said on Wednesday, following a meeting with OPEC Secretary-General Mohammed Barkindo in Caracas. OPEC members are due to meet on Nov. 30.
Russia has also expressed willingness to support an OPEC decision to freeze oil output, Russian Energy Minister Alexander Novak said on Wednesday, adding that he may meet Saudi Arabia’s Energy Minister Khalid al-Falih at a gas conference in Doha this week.
Despite renewed optimism that an OPEC output freeze is on track, rising oil production data and changing fundamentals “makes a credible OPEC cut all the more difficult to achieve”, American investment bank Jefferies said in a note on Thursday.
“The physical market has shifted back to oversupply because of surging OPEC output, with the most material increases driven by improving security conditions in Libya and (tenuously) Nigeria,” the U.S. bank said adding that it maintains its 2017 Brent forecast at $58 a barrel.