Oil prices tumbled on Wednesday, continuing Tuesday's slide after the International Energy Agency cast doubts over the past months' narrative of tightening fuel markets.
IEA said it had cut its longer-term oil price projections from past year, partly because of the falling cost of both renewable and conventional sources of energy, the worldwide push to tackle climate change and improve air quality and the boom in USA shale oil and gas output.
"Total commercial US crude oil inventories declined by 25 million barrels from the last week of July to the week ending November 3, but inventories in Cushing increased by 8.8 million barrels".
Oil price should continue to rise towards $83 a barrel by the mid-2020s as global oil demand is poised to fall only modestly alongside the expected rise in electric vehicles over the next two decades, the International Energy Agency, or IEA, said on Tuesday.
Crude oil futures were lower for a second session Wednesday as traders assessed a pair of crucial USA economic reports.
As of 16:02 GMT, West Texas Intermediate crude oil futures were 1% lower at $55.17 a barrel on the ICE.
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"Using a scenario whereby current levels of OPEC production are maintained, the oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2Q18", the agency said. On the supply side, rising US output also pressured prices.
Oil prices will react later in the day when the U.S. Energy Information Administration releases official data.
US oil production C-OUT-T-EIA has already increased by more than 14 percent since mid-2016 to 9.62 million bpd. The latest government data is due on Wednesday.
Led by USA output, the IEA said non-OPEC production will add 1.4 million bpd of additional production in 2018. The IEA's outlook pressures OPEC to keep restraining output in order to defend crude prices, which its members rely on for revenue.
That deal is due to expire at the end of March 2018 but ministers have signaled that they are likely to extend the agreement, possibly until the end of next year. The satellite imaging analysts said in a tweet that they had identified 624 floating roof storage tanks in Saudi Arabia, nearly twice as many as industry databases have.