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U.S.
crude oil stockpiles rose 4.6 million barrels in the week to
Sept. 25, the American Petroleum Institute (API) said, well
above a modest increase of 100,000 barrels that analysts polled
by Reuters had forecast.
Investors awaited official weekly inventory figures from the
U.S. government's Energy Information Administration (EIA) due
later on Wednesday to see if they confirmed the API data.
U.S. crude, also known as West Texas Intermediate or WTI, was 15
cents lower at $45.08 a barrel by 1040 GMT, on course to end
September down 11 percent.
Brent crude oil was 9 cents lower at $48.14 a barrel, heading
for a near 9 percent fall this month.
Brent traded in a very narrow 60-cent range in early trade on
Wednesday, partly reflecting low volume ahead of the week-long
Chinese National Day holiday starting on Thursday.
If this range were to be maintained for the rest of the session,
it would be the narrowest daily range since May 2014.
"The downward pressure is coming from ongoing high OPEC crude
production, led by Saudi Arabia and Iraq, and expectations of
global stockbuilds for an extended period," said Societe
Generale oil analyst Michael Wittner.
Analysts polled by Reuters said oil prices would remain
depressed, forecasting an average Brent price of $58.60 a barrel
in 2016, well below $62.30 expected last month.
Inaction by the world's largest crude exporter Saudi Arabia to
prop up prices has helped it build market share, a Reuters
analysis shows. Saudi exports to Asian and European consumers
reached multi-year highs in the first half of the year.
Saudi Arabia is banking on a rise in world oil demand and slower
growth in non-OPEC oil supply, meaning it is unlikely to change
its stance on not cutting production any time soon.
The chief executive of commodity trader Vitol, Ian Taylor, said
on Wednesday he was seeing signs that global oil supply and
demand were beginning to balance out.
"This is beginning to happen ... Demand is very strong, you can
see U.S. production beginning to come down," he said, declining
to give a forecast for oil prices.
(Additional reporting by Aaron Sheldrick in Tokyo and Henning
Gloystein in Singapore; Editing by Christopher Johnson)
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