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Industry data released on Tuesday by the American Petroleum
Institute (API) showed crude inventories at the Cushing,
Oklahoma, hub rose 2.3 million barrels last week, compared with
analyst expectations for a decrease of the same volume. [API/S]
"The U.S. crude oil stocks build reported by the API last night
is weighing on prices," said Tamas Varga, analyst at London
brokerage PVM Oil Associates.
U.S. crude <CLc1> held above $50 a barrel, trading down 64 cents
at $50.22 at 1140 GMT, 1.2 percent lower than the previous
session's settlement.
The August contract <CLQ5>, which expired on Tuesday, settled at
$50.36 a barrel on its last day of trade, after slipping as low
as $49.77 during the session, its weakest point in more than
three months.
Brent crude <LCOc1> was down 40 cents at $56.64 a barrel.
U.S. government crude stocks data to be released by the Energy
Information Administration (EIA) at 1430 GMT is expected to shed
further light on the build-up in inventories.
"Any indication of rising oil inventories in this week's EIA
weekly report is likely to weaken oil prices further," analysts
at ANZ said in a note to clients.
The global oil glut and subsequent price drop has thus far left
OPEC members cold.
Delegates from members of the Organization of the Petroleum
Exporting Countries (OPEC) indicated this week they expected the
price drop to be short-lived and that they would not defer from
a strategy of keeping output high to maintain market share.
Pressure has been rising on OPEC states to adjust production in
the face of a rise in Iranian exports once Western sanctions are
loosened. A sharp fall in the Chinese stock market and fallout
from the Greek debt crisis have also added to concerns about
demand being strong enough to absorb high supply.
The global supply glut is also taking its toll on the products
market. China's exports of diesel in August are expected to
reach their highest since at least 1999 as the domestic market
cannot absorb high output from refineries, sources said.
OPEC kingpin Saudi Arabia has also been stepping up exports of
diesel.
(Additional reporting by Jacob Gronholt-Pedersen in Singapore;
editing by Dale Hudson and Jason Neely)
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