Crude oil inches lower on expectations for US crude stock build

Oil prices slipped on Wednesday on expectations for a build-up in US crude inventories, but Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.

US WTI crude futures were at $63.36 a barrel at 0208 GMT, down 15 cents, or 0.24 percent, from their previous settlement. Brent crude futures dipped to $67.94 per barrel, down 18 cents, or 0.26 percent, after it rose 0.7 percent on Tuesday.

US crude inventories likely saw a build for the second straight week, while refined product stockpiles were forecast to have declined last week, an expanded

Reuters poll showed on Tuesday. “With the change in prices being only a few cents, I think the oil market is waiting for the next development and of course the US inventories data due tonight (Wednesday) is very good reason for traders to be waiting,” said Michael McCarthy, Chief Market Strategist at brokerage CMC Markets.

Industry group the American Petroleum Institute, however, said on Tuesday US crude stocks have unexpectedly fallen last week as refineries boosted output. “With total combined stocks of crude oil and refined products coming in around unchanged on the week, I would call it a neutral data point,” said Dominic Chirichella, senior partner at the Energy Management Institute in New York.

Official US inventory data will be published by the Energy Information Administration (EIA) late on Wednesday. “The EIA data has not (always) been in sync with the API data so we could see a different set of data points Wednesday morning,” Chirichella said.

Meanwhile, Russian Energy Minister Alexander Novak said on Tuesday that a joint organisation between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries may be set up after the current deal on production cuts expires at the end of this year. “Russia is testing the upper production bands but provided they don't ramp up dramatically I think this news will be viewed in a positive light for prices,” said Stephen Innes, head of trading for Asia–Pacific at futures brokerage OANDA in Singapore.

Oil has risen from a multi-year low near $27 a barrel in January 2016, helped by production cuts led by OPEC and Russia, which began in 2017 in order to rein in over-supply and prop up prices. Top producer Russia's oil output rose in March to 10.97 million barrels per day, up from 10.95 million bpd in February, official data showed earlier this week, prompting some traders to worry the OPEC-non-OPEC alliance to help balance oil markets was under threat.