Oil ends mixed, US crude eases before inventory report

[NEW YORK] Oil prices settled mixed on Tuesday, with New York-based futures down slightly, as market participants awaited the US government's inventory data amid a global oversupply that was pressuring prices.

Industry group American Petroleum Institute (API) said in a preliminary report US crude stockpiles had risen 7 million barrels last week, way above the 3.7 million barrels expected by analysts in a Reuters survey.

The US Energy Information Administration (EIA) will report official inventory data on Wednesday. "The API numbers set the stage again for tomorrow's EIA report, which is expected to show a fourth straight week of builds," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Expressing surprise at the API data, Jarvis said he had expected builds due to seasonal maintenance for US refineries"but certainly not these kind of numbers".

Brent futures for December delivery, settled 10 cents up at US$48.71 a barrel. It turned negative in post-settlement trade, trading down 5 cents at US$48.56 a barrel by 4.55pm EDT (1655 GMT) after the release of the API data.

US crude futures for November, which expired at Tuesday's settlement, finished down 34 cents at US$45.55 per barrel.

The December US contract, which will become front month on Wednesday, settled up one cent at US$46.29. That was down 37 cents in post-settlement trade. "The threat of excessive supply is constantly hitting brief rallies, just like what occurred at the end of the US session today," said Richard Hastings, macro strategist at Seaport Global Securities.

While US shale output was not declining much, Iraqi and Libyan production were strong and Iran was attempting to regain market share once nuclear-related sanctions are lifted against Tehran, Mr Hastings said.

Alongside the regular focus on US oil inventories, analysts said the market was also keeping a close eye on the meeting of Opec and non-Opec oil market experts in Vienna on Wednesday.

"I believe the general consensus is nothing will be accomplished insofar as a plan to cut production but I think there is just a level of cautiousness in case of a surprise," said Energy Management Institute analyst Dominick Chirichella.

Major oil exporters in the Middle East are pumping around 2 million barrels per day more crude oil than needed at the moment, analysts say, filling inventories around the world.

REUTERS