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Oil futures dipped back down to well below $50 on Tuesday after the American Petroleum Institute (API) reported a build on U.S. crude oil supplies of 1.2 million barrels for the week ended 10 June.
On Wednesday morning, the Brent crude for August delivery was down 1.32 percent to US$49.17 per barrel, while WTI crude for July delivery was down 0.87 percent at US$48.07 per barrel.
While the API put the build at 1.2 million barrels, analysts surveyed by S&P Global Platts forecast a 1.4-million-barrel draw. Analysts surveyed by the Wall Street Journal have forecast a drop in U.S. crude oil inventories of 2.1 million barrels.
The official U.S. crude oil inventory data will be released later on Wednesday by the Energy Information Agency (EIA), which in recent weeks has frequently come out with data that contradicts API reports.
If the EIA confirms the API’s build on inventory, analysts are calling it a “counter-seasonal build in stocks”.
The API data is not definitive and serves only as an estimate based on numbers reported by its members only, while the EIA data is an official census.
Also weighing the price of oil is the possibility of the U.K. leaving the European Union ahead of a British referendum on the issue. Related: Uranium Prices Set To Double By 2018
Last week, the API reported a draw of 3.56 million barrels, which was close to the anticipated draw of 3.5 million, pushing oil up to $51 per barrel, the highest since July 2015.
On Tuesday, the International Energy Agency (IEA) said that oil supply and demand will balance in the second half of 2016 after a series of unplanned production outages, but that the market should move to surplus in the first half of 2017.
By Charles Kennedy of Oilprice.com
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Charles is a writer for Oilprice.com