11 November 2015, News Wires – US crude prices fell in Asian trading on Wednesday after industry data showed an increase in US stockpiles, while fears that Japan’s economy may have fallen into recession added to demand woes.
Benchmark US crude futures slipped to a two-week low at $43.55 a barrel in early trading before edging back up to $43.73 a barrel later in the morning, still down almost half a dollar from their last close.
Internationally traded Brent crude futures were down 28 cents at $47.16 a barrel.
The price drop came on the back of rising stocks in North America and slowing economies in Asia.
US crude stocks jumped by 6.3 million barrels in the week to 6 November to 486.1 million, data from industry group the American Petroleum Institute showed late on Tuesday, compared with analyst expectations for an increase of 1 million barrels.
On the demand side, confidence among Japanese manufacturers fell in November for a third straight month to levels unseen in more than two years, a Reuters poll showed on Wednesday, reflecting fears that a China-led slowdown in overseas demand may have pushed Asia’s second-biggest economy into recession.
“The weakness of global manufacturing activity is … putting pressure on energy demand,” JBC Energy said, adding that it expected a significant drop in oil demand growth in 2016.
The oil market is also looking for any indicators from Opec over its production policy.
Since oil prices began falling in June 2014, Opec has followed a Saudi-led policy of keeping production high in order to defend market share against other producers like Russia and North America, but there are calls from within the group, like Venezuela and Algeria, to cut output to prop up prices.
But BNP Paribas said that it expected Opec and its policy leaders in the Middle East to continue pumping for market share.