Oil backs off as focus stays on supply

Crude prices moved lower as the market weighs up the level of oversupply.

Brent dipped 1.5% on Wednesday

Oil prices backed off on Wednesday as the US crude market was reminded of oversupply concerns.

Brent dipped 1.5% to US$47.70, and West Texas Intermediary futures slipped 1.2% to US$46.25 per barrel.

Statistics from the American Petroleum Institute (API) showed an unexpected 2.2mln barrel rise in crude inventories, which weighed on prices.

Energy Department figures, released today, showed the opposite however with a 2.55mln barrel reduction in the stockpile.

Internationally, the focus is sharpening on the return of significant supplies.

Thomas Pugh, commodities economist at Capital Economics, highlighted that almost 1m barrels of oil per day has come back online over the last month.

“The return of production from Canada and Nigeria along with a potential increase in output from Libya over the next few months should put some downward pressure on prices,” Pugh said in a note.

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