The American Petroleum Institute said on Tuesday crude stocks increased by 1.6 million barrels last week. The U.S. government's Energy Information Administration (EIA), which issues its latest report on Wednesday, already shows stocks at a record high. <EIA/S>
Crude had come under pressure on Tuesday from International Energy Agency (IEA) forecasts of continued supply growth in the United States to 2020 despite lower prices, and of a possible further rise in stocks this year.
"The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate," Fereidun Fesharaki at Facts Global Energy said in a market note.
"This all means a weak market in 2015 and even lower oil prices. Demand rebound will not save the oil market."
Brent crude futures LCOc1 were down $1.37 cents at $55.06 by 1415 GMT (09:15 a.m. EST). U.S. crude CLc1 traded at $49.22, down 80 cents, having reached a high of $51.14 earlier in the session.
After more than halving since June, oil prices have rallied by over 20 percent in the last four weeks. Kuwaiti Oil Minister Ali al-Omair said on Wednesday crude prices could rise to $60 a barrel by the end of the year.
But analysts agreed with IEA predictions that following the crash, oil prices would stabilize well below the highs of more than $100 a barrel seen in the last three years.
Jefferies Bache analysts said Brent and U.S. crude, known as West Texas Intermediate (WTI), would fall in the short term.
"We still expect fresh WTI lows and an ultimate decline towards the $40 area," they said in a note to traders. "Assuming our $40 WTI target is achieved, a nearby Brent price in the $48 area would be implied."
"All in all, we are maintaining a bearish stance."
Adding further pressure on prices, the EIA kept its 2015 and 2016 domestic oil output forecasts virtually unchanged from the previous month.
The EIA expects U.S. oil production in 2015 to be 9.3 million barrels per day, slightly lower than the 9.31 million bpd forecast in last month's short-term energy outlook.
(Reuters)
