Oil futures fell Wednesday, seeing renewed pressure after a one-day rebound as traders continue to fret about a global crude glut and the prospect of Iran’s return to the export market.
West Texas Intermediate crude for September delivery on Comex CLU5, -0.85% fell 36 cents, or 0.8%, to $47.62 a barrel, while ICE September Brent futures LCOU5, -0.54% lost 24 cents, or 0.5%, to $53.06 a barrel.
Oil broke a four-day losing streak Tuesday. Data from the American Petroleum Institute released late Tuesday showed U.S. crude inventories fell by a larger-than-expected 1.9 million barrels in the week ended July 24.
That sets the stage for the more closely watched weekly data from the Energy Information Administration on Wednesday morning. Traders will be watching the data for confirmation of the API figures, said Timothy Evans, analyst at Citibank, in a note.
“The market is pretty oversold and due for a bounce, but our sense is that the price reaction will prove limited, with most traders recognizing that one week’s numbers won’t turn a bear market into a bull,” Evans said.
Oil might also prove sensitive to the statement following the conclusion of the Federal Reserve policy meeting on Wednesday, analysts said.
Meanwhile, some analysts contend investors are too focused on near-term supply concerns and Iran and should instead be paying more attention to China.
While the plunge by Chinese stocks has helped weigh on oil and other industrial commodities, analysts at Capital Economics said they expect the country to avoid a “hard landing.”
“Our China Activity Proxy shows that growth actually picked up towards the end of the second quarter and the authorities still have plenty of tools to boost support to the economy (and indeed the equity market) if recent turbulence shows signs of getting out of hand,” they said, in a note. ”That should be positive for oil prices.”
August gasoline futures RBQ5, -0.53% fell 0.55 cent, or 0.4%, to $1.7977 a gallon, while August natural gas futures NGQ15, +1.17% rose 2.4 cents, or 0.9%, to $2.845 per million British thermal units.