(Bloomberg) -- Oil fell for a third day as an industry report showing rising stockpiles at America’s largest crude storage hub overshadowed signs that Saudi Arabia is willing to make deeper production cuts.
Futures in New York dropped as much as 0.5% after losing 2% over the previous two sessions. The American Petroleum Institute reported that inventories at Cushing, Oklahoma, rose by 1.22 million barrels last week, according to people familiar with the data. The kingdom is ready to reduce output more than agreed with other global producers, Nigeria’s petroleum minister said after a meeting with his Saudi counterpart, Prince Abdulaziz.
A deteriorating global economy weakened by the U.S.-China trade war has driven a 17% slump in crude since late April. That’s put the onus on the Organization of Petroleum Exporting Countries and allied producers to extend production cuts, although there are question marks over Russia’s participation. Saudi Arabia may need to consider deeper reductions with the U.A.E. and Kuwait if Russia abstains, Citigroup Inc. said in a note.
“The market is paying more attention to the level of American inventories, given that there are less concerns over geopolitical risks,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. Signs that Saudi Arabia and Russia are at odds over production cuts are also weighing on prices, he said.
West Texas Intermediate for December delivery declined 24 cents, or 0.4%, to $55.30 a barrel on the New York Mercantile Exchange as of 10 a.m. in Singapore. The contract fell 0.5% on Tuesday.
Brent for December fell 17 cents, or 0.3%, to $61.42 a barrel on the London-based ICE Futures Europe Exchange after closing little changed the day before. The global benchmark crude traded at a premium of $6.12 to WTI.
--With assistance from James Thornhill.
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