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[SINGAPORE] Oil prices fell in Asia Wednesday, reversing steep gains in the previous session as dealers awaited the latest US energy stockpiles report amid concerns about a sustained global supply glut, analysts said.
US benchmark West Texas Intermediate for July delivery fell 35 cents to US$60.91, while Brent crude for July eased 27 cents to US$65.22 in late morning trade.
WTI jumped US$1.06 and Brent rose 61 cents Tuesday after a sharp fall in the US dollar, which made dollar-priced crude cheaper for buyers using weaker currencies.
But analysts said the surge was momentary, as dealers worried that there could be little change in the current crude oversupply situation for some time to come.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said investors are sitting on the sidelines ahead of the US Department of Energy's latest petroleum report to be released later Wednesday.
Ang said the report for the week to May 29 will likely show crude reserves fell further, after dropping 2.8 million in the previous week. Reserves likely fell 2.5 million barrels last week, according to a Bloomberg News survey.
"The current high inventory of crude in the US would likely be refined at full speed," Ang said.
"US crude production, on the other hand, is of a bigger concern from our view," he said. Last week's report showed a rise in US crude production, by 304,000 barrels per day to 9.57 million.
Analysts said US production levels will be closely watched amid widespread expectations that the Organisation of the Petroleum Exporting Countries cartel will not budge from current output levels at a key meeting in Vienna Friday.
Led by Saudi Arabia, Opec has met the plunge in prices over the past year with increased production, in what some believe is a strategy to drive high-cost producers, especially fracking-based producers in the US, out of the market.
Despite a recent recovery in prices to around US$60, prices remain almost 50 per cent lower than at the same stage last year.