Oil drops for second day; market awaits U.S. stocks data
Crude oil lost more ground on Wednesday with rising U.S. oil output adding pressure on the market, although OPEC production cuts continued to offer support.
Investors in the oil market are awaiting weekly inventories data from the U.S. Energy Information Administration due at 1530 GMT on Wednesday, according to Reuters.
West Texas Intermediate crude futures lost 15 cents, or 0.3 percent, to $53.86 a barrel by 0723 GMT, and Brent crude gave up 13 cents, or 0.2 percent, to $56.38.
"Signs that the U.S. shale industry is recovering weighed on the market," ANZ said in a report.
U.S. crude stockpiles have risen for seven straight weeks. Forecasts for another build last week, this time of 3.1 million barrels, have fueled worries that demand growth may not be sufficient to soak up the global crude oil glut.
U.S. stockpiles rose 2.5 million barrels in the week ended Feb. 24, according to a report from trade group the American Petroleum Institute. Gasoline stockpiles rose unexpectedly and distillate stockpiles fell more than expected, the API said. Crude declined slightly on the report.
The market rose earlier in the session as a speech by U.S. President Donald Trump offered little on plans by his administration to boost U.S. oil production.
Market participants had been expecting President Trump to include details on energy policy in a speech to the U.S. Congress but his remarks lacked any specifics.
"If Trump had announced de-regulations of some of the environment protections to make it easier to pump more oil, that might have put pressure on WTI," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
"Now all the attention is around to EIA's crude inventories data tonight."
The Organization of the Petroleum Exporting Countries (OPEC) has cut its oil output for a second month in February, a Reuters survey found on Tuesday, showing the exporter group has boosted already strong compliance with its supply curbs on the back of a steep reduction by Saudi Arabia.
Brent oil looks neutral in a range of $55.93 to $57.26 per barrel, and an escape could suggest a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
U.S. oil may edge up to a resistance at $54.28 per barrel, a break above which could lead to a further gain to $54.62.