Oil dips as U.S. inventory build stokes supply fears

TOKYO, July 8 (Reuters) - Oil prices eased in early trade on
Wednesday as industry data showing a build in U.S. crude
stockpiles and a forecast for U.S. crude output to fall less
than anticipated in 2020 added to worries about oversupply.
Brent crude LCOc1 futures fell 13 cents, or 0.3%, to
$42.95 a barrel by 0019 GMT. U.S. West Texas Intermediate (WTI)
crude CLc1 futures dropped 10 cents, or 0.3%, to $40.52 a
barrel.
Prices were little changed in the previous session and have
been held in a narrow band over the past two weeks as concerns
about a spike in coronavirus cases globally tempers optimism
about a recovery in fuel demand.
U.S. crude oil stockpiles rose last week, against
expectations for a draw, although gasoline and distillate
inventories fell more than expected, data from industry group
the American Petroleum Institute showed on Tuesday. U.S. Energy Information Administration's (EIA) said on
Tuesday U.S. crude oil production is expected to fall by 600,000
barrels per day (bpd) in 2020, a smaller decline than the
670,000 bpd it forecast previously. However, it also expected global oil demand would recover
through the end of 2021, predicting demand of 101.1 million bpd
by the fourth quarter of next year. "The EIA's forecast of a lower decline in U.S. output was
partially offset by its outlook for firm demand recovery, which
limited losses in oil markets," Hiroyuki Kikukawa, general
manager of research at Nissan Securities said.
"Still, expectations that the Organization of the Petroleum
Exporting Countries (OPEC) and allies would taper oil output
cuts from August and softer U.S. equities added to pressure," he
said.
Abu Dhabi National Oil Co (ADNOC) plans to boost oil exports
in August, the first signal that OPEC and its allies, together
known as OPEC+, are preparing to ease record oil output cuts
next month, three sources familiar with the development told
Reuters. Key ministers of the OPEC+ are due to hold talks next week.
Meanwhile, the number of confirmed coronavirus cases in the
United States pushed past 3 million on Tuesday, according to a
Reuters tally.