March 8 (UPI) -- Crude oil prices early Wednesday moved sharply lower after an industry group reported a large buildup in inventories, suggesting supply-side pressures remain.
Crude oil prices moved between gains and losses in intra-day trading for most of the week as traders mulled over competing trends in production. Saudi Arabia is leading a strong charge of compliance with a multi-lateral deal to curb production, which in turn has propped up crude oil prices enough to encourage growth in U.S. shale oil.
In its latest monthly forecast, the U.S. Energy Information Administration said it expected full-year 2017 production to average 9.2 million barrels per day, an increase of 200,000 barrels per day from the previous estimate. The American Petroleum Institute, meanwhile, reported U.S. crude oil inventories increasing significantly to 11.6 million barrels last week.
That was enough to break crude oil prices out of a narrow trading band characterized by minor gains and losses. The price for Brent crude oil was down 1.1 percent from the previous close to $55.32 per barrel about a half hour before the start of trading in New York. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.2 percent to $52.51 per barrel.
The EIA releases formal data on weekly crude oil production and storage levels today. EIA data often mirrors API figures, though federal estimates are usually lower than the industry's. Gains in both U.S. oil production and storage levels could influence the severity of the contraction in oil prices for the trading day.
Oil prices came under pressure early Monday after steady gains in U.S. exploration activity, which could eventually show up as further gains in production.
"The uptick in drilling has pushed U.S. output to more than 9 million barrels per day, some 600,000 barrels per day off its recent low," S&P Global Platts Oil Futures Editor Geoffrey Craig said in an emailed statement. "That growth has partly negated losses from OPEC producers keeping a ceiling on crude prices in the mid-$50 per barrel range."
A survey this week from Platts found parties to the production arrangement from the Organization of Petroleum Exporting Countries are 340,000 barrels per day above their limit.