NEW YORK/LONDON: Oil prices fell about 2 percent on Wednesday as glut worries resurfaced after a reported rise in U.S. crude inventories and as OPEC signalled a growing crude surplus next year unless production cuts by the world's top exporters are implemented.
Data from the American Petroleum Institute late on Tuesday showed U.S. crude inventories rose by 4.7 million barrels in the week to Dec. 9, compared with analysts' expectations for a 1.6-million-barrel decline.
"The crude supply surge was led by another whopping 3.2-million-barrel increase in Cushing, Oklahoma," said Phil Flynn, analyst at Chicago-based brokerage Price Futures Group.
"The builds in Cushing in recent weeks have kept supply in the U.S. from falling harder and this week broke the recent strings of decline."
Official inventory data from the U.S. Energy Information Administration will be released at 10:30 a.m. EST (1530 GMT).
Brent futures for February delivery were down 79 cents to $54.93 a barrel, a 1.4 percent loss, by 9:48 a.m. EST (1448 GMT). U.S. crude fell 99 cents to $51.99 per barrel, a 1.9 percent loss.
The Organization of the Petroleum Exporting Countries on Wednesday signalled a growing oil supply surplus next year unless members implement their deal to curb output from record levels and outside producers also deliver on cutback pledges made over the weekend.
In a monthly report, OPEC said that without cuts the 2017 overhang would reach 1.24 million bpd, about 300,000 bpd higher than the forecast in its previous report.
OPEC pumped 33.87 million bpd last month, according to figures OPEC collects from secondary sources, up 150,000 bpd from October.
Saudi Energy Minister Khalid al-Falih said it would take some time for the market to recover after the deal between OPEC and rival producers to limit supplies.
"We expect the impact ... in terms of fundamentals to take several months to be reflected on the market," Falih told reporters.
OPEC and 11 producing countries from outside the group agreed to cut almost 1.8 million bpd of production in an effort to end two years of oversupply and cheap oil.
The International Energy Agency said global oil supply rose to a record 98.2 million bpd in November, with OPEC production offsetting declines elsewhere.
This stands against expectations of 96.95 million bpd of global oil demand for the fourth quarter of 2016.
Still, the IEA said that due to increased demand oil markets could show a shortfall of 600,000 bpd early next year if producers stick to their reduction plans.
Markets also focused on an anticipated U.S. interest rate hike that would likely boost the dollar, making greenback-traded fuel imports more expensive for countries using other currencies.
"The market is demanding a rate rise and the Fed better deliver it today, for if it doesn’t the bank’s credibly will be severely damaged," said Fawad Razaqzada, market analyst for forex.com.