Oil back in the red ahead of EIA, OPEC report

Oil prices on both sides of the Atlantic extend its retreat from more-than one-week highs, bringing an end to the Asian consolidation phase, despite a broadly lower US dollar.

WTI back below $ 43 mark

Currently, both crude benchmarks are down nearly 1%, with Brent near $ 44.60, while WTI drops below 42.50 levels. After a brief period of consolidation, the black gold broke to the downside on renewed oversupply worries after the US API inventory report showed an unexpected build. Crude inventories in the US expanded by 2.1 million barrels during the week to August 5, against forecast of a fall of about 1 million barrels.

Moreover, uncertainty surrounding the proposed producers’ meeting on output freeze talks, also exerted fresh selling pressure on the prices. Further weighing on oil, the latest EIA monthly report revealed that the US crude oil output to reach 8.31 million bpd next year, up from its forecast of 8.2 million bpd in July.

On Monday, the black gold surged to the highest levels in seven days after renewed oil output freeze talks returned to markets, in light of the recent oil price declines.

Markets now await the official data from the US government (EIA) that will be published later in the NA session, while the focus also remains on the OPEC’s monthly oil report due later today.