SINGAPORE - Oil prices fell more than a percent on Wednesday as industry data showed a larger-than-expected weekly build in US stockpiles and as Saudi Arabia
reported record output in March.
The decline in prices followed a rally on Tuesday, when US crude approached 2015 highs following strong jobs data and government forecasts for lower US crude production growth and higher global demand for oil.
"We're going to need to see a very big uptick in demand to offset that supply," Ben Le Brun, analyst at OptionsXpress in Sydney said. "There is a glut of supply in oil at the moment."
Brent May crude LCOc1 was down 61 cents at $58.49 a barrel by 0235 GMT and US May crude CLc1 was down 97 cents at $53.01 a barrel. Both benchmarks posted strong gains in the past two sessions, but are still down about 50 percent since June last year, when prices began their fall.
Data from the American Petroleum Institute (API) showed US crude stocks surged 12.2 million barrels last week against analysts' expectations for a increase of 3.4 million barrels. The EIA's weekly inventory report will be released at 1430 GMT on Wednesday. [API/S]
Adding to that supply, Saudi oil minister Ali al-Naimi said late on Tuesday that Saudi output would likely remain around 10 million barrels per day (bpd) after posting a record high of 10.3 million bpd in March. [ID:nL2N0X426Q]
Naimi also said the Kingdom stood ready to "improve" prices but only if producers outside the Organization of the Petroleum Exporting Countries (OPEC) joined the effort.
"OPEC has not shown any sign in cutting output and Iran will be releasing more reserves," Le Brun said.
Iranian oil officials are in Beijing this week to discuss oil sales and Chinese investments in Iran, just days after Tehran and world powers reached a framework nuclear deal. - Reuters