Oil prices down ahead of US energy report
US benchmark West Texas Intermediate for October delivery fell 13 cents to $44.02 while Brent crude for October dropped 32 cents to $47.26 in afternoon trade.
“We have seen US production levels slowing in recent weeks, and those figures will next be in focus for investors seeking answers on the oversupply issue,” Ric Spooner, chief market analyst at CMC Markets in Sydney, told AFP.
The Department of Energy (DoE) will release its weekly report Thursday, a day later than usual because of Monday’s Labor Day holiday.
Analysts expect commercial crude-oil inventories rose 250,000 barrels in the week to September 4, according to a Bloomberg News survey.
At the same time, the DoE predicted in a new report Wednesday that US crude-oil production would decline through the middle of next year in response to low prices, before picking up again in late 2016 on an expected recovery in prices.
US crude output fell 140,000 barrels per day in August from July. The government lowered its 2015 production estimate to 9.2 million barrels per day, 100,000 barrels lower than its month-ago forecast.
Even so, total US output this year is expected to be the highest since 1972.
Investors are also keeping an eye on the Federal Reserve’s plans for interest rates as bank policymakers hold a meeting next week, with speculation they could announce a rise.
A hike in borrowing rates would likely push up the dollar, and with crude priced in the greenback it would make the commodity more expensive for anyone holding weaker currencies, denting demand.