LOS ANGELES (MarketWatch) — Benchmark U.S. oil futures dipped below $98 a barrel in electronic trading Wednesday after the American Petroleum Institute reported a surprisingly large rise in crude supplies.
The API said supplies rose 5.9 million barrels for the week ended Oct. 25, according to sources. A Platts survey of analysts showed a forecast for a climb of 3.5 million barrels. The API data precedes the more closely watched Energy Information Administration report due later Wednesday.
By late Wednesday morning in East Asia, December crude (CLZ3) had shed 58 cents, or 0.6%, to $97.62 a barrel, down from the $98.20 close on the New York Mercantile Exchange.
Bloomberg Separately, Brent crude for December (UK:LCOZ3) gave up 36 cents, or 0.3%, $108.65 a barrel.
"The [Nymex crude] market may have derived some support from bargain-hunting by traders viewing this market as undervalued at a discount of $10.81 per barrel to the Brent market," said Citi analyst Tim Evans.
"With a few more weeks to go before U.S. refineries begin ramping up output to a degree that rebalances the U.S. market, we see the [Nymex crude] weakness as likely to continue," Evans said.
A day earlier, oil ended in the red for the first time in four sessions, as a drop in U.S. consumer confidence dampened the outlook for energy demand.
Elsewhere in the energy complex, November gasoline (RBX3) held steady at $2.61 a gallon, while November natural gas (NGX13) lost 7 cents, or 1.8%, to $3.50 per British thermal unit.
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