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REUTERS

Oil prices dipped on Wednesday as rising crude stocks in the US underscored an ongoing global fuel supply overhang despite an Opec-led effort to cut output.

 

Prices for front-month Brent crude futures, the international benchmark for oil, were at $50.89 per barrel early on Wednesday, down 7 cents from their last close.

 

US West Texas Intermediate crude futures were down 10 cents at $48.14 a barrel.

 

"Crude oil prices fell as concerns over rising US inventories resurfaced," ANZ bank said on Wednesday.

 

US crude inventories climbed by 4.5 million barrels in the week to 17 March to 533.6 million, the American Petroleum Institute (API) said late on Tuesday.

 

"The American Petroleum Institutes' crude inventories stuck the knife into crude overnight, coming in at a 4.5 million barrel increase against an expected increase of 2.8 million barrels," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

 

"If the API stuck the knife in, tonight's EIA Crude Inventory figures may twist it. A blowout above the 2.1 million barrel increase expected, may well torpedo oil below the waterline," he added.

 

Official US Energy Information Administration (EIA) oil storage data is due on Wednesday.

 

The bloated storage comes as US oil production has risen over 8% since mid-2016 to more than 9.1 million barrels per day, levels comparable to late 2014, when the oil market slump started.

 

Rising production in the US and elsewhere, and bloated inventories, are undermining efforts led by Opec to cut output and prop up prices.

 

"2017-19 is likely to see the largest increase in mega projects production in history," Goldman Sachs said in a note to clients on Tuesday.