Oil prices dip further

Crude prices were on the backfoot again on Wednesday, extending this week’s losses amid speculation weekly supply data due later in the day will show a surprise increase in U.S. crude inventories.

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended Nov. 24 at 10:30AM ET (1530GMT).

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 1.8 million barrels last week. That compared with analysts’ expectations for a decline of around 3.1 million barrels.

The API report also showed a drop of 1.5 million barrels in gasoline stocks, while distillate stocks increased by 2.7 million barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

Mounting uncertainty over a possible extension of output cuts by major crude producers further dampened sentiment.

U.S. West Texas Intermediate (WTI) crude futures lost 23 cents, or about 0.4%, to $57.76 a barrel by 3:30AM ET (0830GMT). It lost 0.2% a day earlier.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., shed 29 cents, or 0.5%, to $62.95 a barrel.

Oil prices extended their decline into a second session on Tuesday as doubts over an extension to a production-cut deal at Thursday’s OPEC meeting weighed.

Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on Thursday to decide whether to extend their current production agreement beyond a March 2018 deadline.

Most market analysts expect the oil cartel to extend output cuts for a further nine months until the end of next year, but the terms were so far unclear, as Russia has sent mixed signals about whether it will back the move.

In November last year, OPEC and 11 other non-OPEC producers, led by Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30. The agreement was extended in May of this year for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.

The OPEC-led production cuts have been one of the key catalyst supporting the recent rally in oil prices amid expectations that rebalancing in oil markets are well underway.

However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies are prevented prices from rising much further, according to market participants.

In other energy trading, gasoline futures dipped half a cent, or 0.3%, to $1.758 a gallon, while heating oil declined 0.7 cents to $1.945 a gallon.

Natural gas futures rallied 5.3 cents, or 1.7%, to $3.180 per million British thermal units, as updated weather forecasting models showed a return to cold winter weather.