Oil prices drop before more US stockpiles data

London - Oil prices fell on Wednesday after data indicated a rise in US stockpiles, reigniting concerns about a supply glut, while profit-takers stepped in after the previous day's rally.

Going forward, higher-than-forecast demand should bolster oil prices throughout 2016, despite high stocks continuing to exert downward pressure on prices, the International Energy Agency said Wednesday.

On Tuesday, the American Petroleum Institute reported a 2.2-million barrel rise in US crude reserves last week.

The figures rattled traders as the US Department of Energy prepares to release later Wednesday its own crude inventory figures, considered a key gauge of demand in the world's top oil consumer.

At about 13:30, US benchmark West Texas Intermediate for delivery in August was down 63 cents at $46.17 a barrel compared with Tuesday's close.

Brent North Sea crude for September delivery shed 81c to $47.66 a barrel.

Both contracts surged almost five percent Tuesday from two-month lows after OPEC said it expected the global supply glut to ease this year and next thanks to reductions in output from producers outside the cartel, particularly the United States.

Prices have fluctuated between $44 and $52 a barrel over the past month after hitting near 13-year lows below $30 in February, but a surge in OPEC production in June has revived fears about oversupply.

Energy information provider S&P Global Platts has said production from the Organization of the Petroleum Exporting Countries climbed 300 000 barrels per day (bpd) in June, close to an eight-year high of 32.73 million bpd.

This was owing to a tentative recovery in production in Nigeria and Libya, and a "steady" rise in output from Saudi Arabia and Iran, it said.

"The market has realised that surplus that we had was disrupted, and that it is coming back because those disruptions are going away," said David Lennox, an analyst at Fat Prophets.

Canadian producers are also gradually coming back online, restoring supply for the biggest crude supplier to the US market, after wildfires swept through the Alberta oil sands region from May to July.

The IEA on Wednesday said global demand for oil will grow by 1.4 million barrels per day this year to 96.1 million bpd, revising higher last month's forecast.

Last month the agency had warned significant price rises were unlikely given that "there is an enormous inventory overhang to clear".