NEW YORK, Nov. 2 (UPI) -- Supply-side pressures resurfaced to add negative pressure to crude oil prices Wednesday, one day after a rally collapsed on U.S. pipeline issues.
Crude oil prices staged a brief rally in Tuesday trading, though that fizzled out and sent the market crashing after Colonial Pipeline Co. said it may have its network in Alabama up and running earlier than expected.
With two lines out following a fatal explosion, a long-term outage would've caused severe shortages for fuels in the region and put pressure on demands. The network is the longest fuels system in the United States, but repairs could come as early as the weekend.
Late Tuesday, the American Petroleum Institute reported U.S. crude oil inventories increased by about 9.3 million barrels for the week ending Oct. 28, ending a long streak of declines that helped support a price for oil at or above $50 per barrel.
Crude oil markets responded to API's data, which indicates the supply-side pressures that pulled oil below $30 per barrel this year are persistent, by moving sharply lower in early Wednesday trading.
The price for Brent crude oil was down 1.5 percent to start the trading day in New York at $47.44 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, declined 1.8 percent from the previous close to open at $45.85 per barrel.
Analysis from S&P Global Platts this week predicted an inventory increase of 1.9 million barrels. Official data from the U.S. Energy Information Administration arrives later in the trading day Wednesday.
Crude oil price started November on a down note after members of the Organization of Petroleum Exporting Countries left weekend meetings in Vienna with no concrete way forward on how to coordinate a production ceiling proposed in September across the 14 member states.
Some OPEC members are looking for exemptions from the proposed ceiling, which would make implementation difficult. Iran, one of OPEC's top producers, said this week it would continue to work to regain a market share lost to sanctions.