By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices fell more than 1 percent on Wednesday even though U.S. crude stockpiles declined by the most in a year, as data suggesting domestic production was edging higher stoked worries about the global crude glut.
Brent crude futures
U.S. crude inventories dropped for a seventh consecutive week, falling 8.95 million barrels last week to 466.5 million barrels to their lowest since January 2016, the Energy Information Administration said. Including emergency reserves, crude stocks were at 1.15 billion barrels, the lowest since October 2015. [EIA/S]
However, gasoline inventories did not decline as expected, and the data also showed that U.S. crude output rose to 9.5 million barrels per day from 9.4 million a week earlier.
Rising U.S. output could add to global oversupply that prompted the Organization of the Petroleum Exporting Countries and other oil producers to curtail production to boost prices.
Traders weighed the U.S. stockpile draw against the production data.
Gene McGillian, director of market research at Tradition Energy, noted that seasonally, U.S. demand peaks during the summer. "If we see these draws past Labor Day, it will drive the market, possibly past $50.
Matt Smith, director of commodity research at ClipperData, noted that "The peak of summer driving season has now passed, and demand for crude should wane also as refinery runs drop. Gasoline demand will ebb as summer road trips are mostly over and children head back to school."
U.S. gasoline stocks > were unchanged, compared with expectations in a Reuters poll for a 1.1 million-barrel drop. OPEC and other major producers including Russia have pledged to restrict output. Still, U.S. oil production has soared almost 12 percent since mid-2016.
"OPEC and Russia still face an uphill battle in reducing the global supply surplus in the face of growth in output elsewhere and less than compliant behaviour in their midst (Iraq, UAE)," French bank BNP Paribas said.
OPEC member Angola released a loading plan showing October exports were planned at a 13-month high.
On the demand side, analysts see a gradual slowdown in fuel consumption growth.
Energy consultancy Wood Mackenzie said U.S. gasoline demand was peaking due to improving fuel efficiency and the rise of electric vehicles. In China, state-owned China National Petroleum Corporation (CNPC) said gasoline demand would likely peak around 2025 and oil consumption would top out around 2030.
This means oil demand from the world's two biggest consumers may soon stall. Consumption has already peaked in Europe and Japan.
(Reporting by Henning Gloystein and Dmitry Zhdannikov; Editing by Marguerita Choy and David Gregorio)
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