Brent Nurses Losses After Reuters Poll

Brent crude oil nursed losses on as it headed towards $108.50 on Wednesday morning.

The commodity traded at $108.67 at 6:20 GMT after US crude fell by almost $1.00.

Reuters reported that a poll of analysts showed most expect that US crude stockpiles increased by 2.4 million barrels last week to 400 million barrels.

If the US Energy Information Administration’s data, due out later on Wednesday, falls in line with the forecasts, it will mark the US’s largest stock build since records began in 1982. WTI tumbled ahead of the EIA’s data, which in turn dragged Brent prices down.

Brent could face more pressure as the week progresses as several large economic releases could weigh on the commodity. The US Federal Reserve will begin its two day policy meeting on Wednesday, and most are expecting the bank to taper its bond buying purchases by another $10 billion.

Investors will also be watching for Fed Chief Janet Yellen’s forward guidance following the meeting, hoping for a clearer picture of the bank’s timeline for raising its key interest rate.

On Thursday, China is set to release its official purchasing managers’ index which has the potential to create some headwinds for crude. Last week, Chinese HSBC flash PMI showed an increase to 48.3 in April from 48.0 in March, however the figure remained below the 50 point mark which denotes expansion.

An increase in Libyan exports also pressured Brent prices as the nation’s Zueitina port finally restarted and its Hariga port is set to load its second tanker after reopening on Tuesday. 

The increase in Libyan oil has been a slow process, but if the nation’s oil output continues to rise, Brent prices will fall further on oversupply concerns.