Oil prices fell early on Wednesday after a report of rising U.S. fuel inventories underscored concerns that a three-year old crude glut is far from over.
Brent crude futures were at $46.32 per barrel at 0012 GMT, down 33 cents, or 0.7 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 38 cents, or 0.9 percent, at $43.86 per barrel.
Oil had recovered some ground over the past week after falling nearly 20 percent since mid-May, but a report by the American Petroleum Institute showed that U.S. crude inventories rose by 851,000 barrels in the week to June 23 to 509.5 million, compared with analysts’ expectations for a decrease of 2.6 million barrels.
Gasoline stocks rose by 1.4 million barrels, despite the ongoing peak demand U.S. summer driving season.
The price falls come despite an ongoing effort by the Organization of the Petroleum Exporting Countries (OPEC) to cut production by 1.8 million barrels per day (bpd) between January 2017 and March 2018.
Ian Taylor, head of the world’s largest independent oil trader Vitol, says Brent crude prices will stay in a range of $40-$55 a barrel for the next few quarters as higher U.S. production slows a rebalancing of the market.
“Everybody was positioned for a market rebalancing and a stocks draw to happen in the second quarter. And if you look at the macro analysis, that should start happening,” Taylor said in an interview with Reuters.
“But so far it hasn’t happened and everyone has made the same mistake. Nobody has distinguished themselves,” he said.
(Reporting by Henning Gloystein; Editing by Richard Pullin)