Oct. 30 (UPI) -- Crude oil futures were lower as of mid-morning Tuesday as market participants appeared to be positioning themselves for an inventory build-up once data is released later Tuesday by API, and then Wednesday by the EIA.
"The trade is looking for a crude oil inventory build. I would categorize this as a seasonal build as the extended driving season is finally over heading into the North American Time zone change this weekend," John Thorpe, a commodity broker at Los Angeles-based Cannon Trading, told UPI.
WTI crude future prices for front-month delivery traded as of 10:03 a.m. just over 2 percent lower at $65.68 per barrel, while front-month Brent future prices traded 2.3 percent lower at $75.62 per barrel at the same time.
By 11:12 a.m., WTI front-month traded only 1.5 percent lower at $66.05 per barrel, while Brent front-month traded 1.7 percent lower at $76.05.
The American Petroleum Institute is due to release its weekly U.S. oil inventory report Tuesday at 4:30 p.m. EST, which is available only to subscribers. The Energy Information Administration publishes another report separately that it makes available Wednesday. The EIA report also includes inventory levels, calculated differently than API's data.
The summer driving season usually leads to higher consumption of gasoline in the United States for domestic travel, while the early fall is instead a period marked by refinery maintenance, all of which reduces oil consumption.
If inventories are higher than expected in the United States, the world's biggest economy and one of the world's biggest producers and consumers of crude oil, prices worldwide for the commodity could decline.
"The market is discounting this expectation right now," Thorpe said. "The extent of any build-up to be reported by the API would determine future direction."
In other related news, BP reported earlier in the day that its oil and gas production in the quarter that ended in September was 3.6 million barrels of oil equivalent a day.
"Upstream underlying production, which excludes Rosneft and is adjusted for portfolio changes and pricing effects, was 6.8 percent higher than a year earlier, driven by ramp-up of new projects. Rosneft production of 1.2 million barrels of oil equivalent a day was 2.8 percent higher than last year," BP said in a press release. BP and the Russian company have joint venture production partnerships.
Separately, Chesapeake Energy said that it had agreed to buy Wildhorse, an oil and gas company with operations in southeast Texas, for about $4 billion.