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Beijing, China (BBN) – Crude prices held weaker in Asia on Wednesday after industry estimates of U.S. crude inventories showed a less-than-expected dip, raising renewed concerns over bulling shale oil output.
On the New York Mercantile Exchange crude futures for May delivery fell 0.19% to $52.31 a barrel, while on London’s Intercontinental Exchange, Brent eased 0.20% to $54.78 a barrel, reports
U.S. crude stocks fell a less-than-expected 840,000 barrels at the end of last week, the American Petroleum Institute (API) said Tuesday, less than analyst estimates of a 1.47 million barrels dip.
Distillates however fell 1.8 million barrels, more than the 998,000 barrels fall seen and gasoline showed a surprise build of 1.4 million barrels, compared to a 1.938 million barrels decline expected.
The Cushing, Oklahoma, oil storage hub recorded a draw of 670,000 barrels, the second draw since March.
Last week, official data from the Energy Information Administration (EIA) showed a 2.166 million barrels drop in crude stocks. The EIA releases official data on crude and refined product inventories on Wednesday.
Overnight, crude settled lower on Tuesday, after the EIA reported that U.S. shale output in May was set to experience the biggest monthly increase in more than two years.
The EIA’s monthly Drilling Productivity report showed U.S. shale production was set to rise to 5.19 million barrels a day in May.
The expected ramp-up in shale production fuelled concerns that rising U.S. oil production could hinder OPEC’s efforts to cut excess supply, which has pressured prices over the last three years.
Despite concerns over a rise in U.S. shale output, some analysts, however, are adamant that OPEC-led cuts would offset rising levels of U.S. shale production.
OPEC is widely expected to announce that its members will extend the current deal to cut global oil supply at its next meeting on May 25.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd). The deal to cut supply began at the start of this year for period of six months until June.