Oil prices eased on Thursday as U.S. crude futures were pressured by a build in domestic inventories and record production, but losses were limited by forecasts from the Organization of the Petroleum Exporting Countries for a lower-than-expected oil surplus.
Brent crude futures settled at $62.28 a barrel, down 9 cents, while West Texas Intermediate crude settled at $56.77 a barrel, down 35 cents.
U.S. crude stockpiles grew last week by 2.2 million barrels, the Energy Information Administration said, exceeding the 1.649 million-barrel rise forecast by analysts in a Reuters poll. Production hit a record high.
“It’s really about the inventory report today,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “The build in crude oil supply was a bit of a disappointment.”
Crude production rose by 200,000 barrels per day (bpd) to a weekly record of 12.8 million bpd, the EIA said in its weekly report delayed a day by Monday’s U.S. Veterans Day holiday.
“While this increased production could translate to a slightly larger crude surplus than would otherwise be the case in the coming weeks, it is not a game changer and price impact could easily be dampened if oil drilling rig counts continue to trend lower,” said Jim Ritterbusch, president of Ritterbusch and Associates.
The U.S. rig count has fallen for the past three consecutive weeks. The latest figures will be released on Friday at 1 p.m. EST.
Earlier, the market rose about 1% after OPEC pointed to a smaller global crude surplus next year although it still expects its demand to drop as rivals pump more.
OPEC Secretary General Mohammad Barkindo also said on Wednesday that there would likely be downward revisions of supply going into 2020, especially from U.S. shale.
Barkindo said it was too early to say whether further output cuts would be needed.
Falling demand could encourage the exporter group and partners like Russia to maintain supply curbs at a meeting on Dec. 5-6.
“The countdown to the meeting of the OPEC countries has started, and the question of whether the group and its allies will further cut supplies is top of mind,” said Norbert Rucker, head of economics at Swiss bank Julius Baer.
“Current market conditions are testing the petro-nations’ patience and cohesion ... Any major change in policy would come as a surprise.”
Prices were also capped by mixed signs for oil demand in China, the world’s biggest crude importer. Industrial output rose more slowly than expected in October, but oil refinery throughput hit the second-highest level on record.