SINGAPORE: Oil prices eased in early Asian trade on Tuesday as concerns over a crude and fuel oil glut outweighed an expected cut in U.S. shale production and a likely further draw in U.S. crude stocks.
Crude prices fell more than 1 percent in the previous session after concerns about potential supply disruptions eased in the wake of Friday’s attempted coup in Turkey.
U.S. crude, known as West Texas Intermediate (WTI), slipped 13 cents to $45.11 a barrel as of 8.21 p.m. ET after settling down 71 cents, or about 1.6 percent, in the previous session.
Brent crude fell 9 cents to $46.87 a barrel after finishing the previous session down 65 cents, or 1.4 percent.
“Oil prices fell as concerns over supply disruptions in Turkey subsided. Crude continued to flow through Turkey unhindered after the failed coup, according to the country’s Energy Minister,” ANZ said in a note on Tuesday.
“Weaker energy prices will continue to weigh on the wider complex in coming days. However, the impact of supply disruptions in several markets is still expected limit the downside,” the note added.
Fuel inventories in the United States, Europe and Asia are brimming despite the height of peak summer driving season, leading traders to store diesel on tankers at sea amid wilting demand growth and tapering crude production.
However, U.S. shale oil production is expected to fall in August for a tenth straight month – by 99,000 barrels per day to 4.55 million bpd, according to the U.S. Energy Information Administration’s (EIA) drilling productivity report released on Monday.
Further weighing on supply, U.S. commercial crude oil inventories likely fell by 2.2 million barrels from 521.8 million barrels in the week ended July 15, a preliminary Reuters poll of analysts showed on Monday.
That would be the ninth consecutive week stocks have fallen.
The poll was taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API), which will release its stocks report later on Tuesday, and the U.S. Department of Energy’s Energy Information Administration (EIA), which will publish inventory data on Wednesday.