SINGAPORE: Crude oil futures fell on Wednesday as more evidence emerged that China's strategic reserves could nearly be full and U.S. inventories were also ballooning.
Brent crude oil futures dropped 18 cents to $54.93 a barrel at 0812 GMT. U.S. WTI crude was down 36 cents at $47.15 per barrel.
China has been taking advantage of cheap oil to build up its SPRs, which helped push its imports to record highs late last year despite an economy growing at its lowest pace in 25 years, but existing capacity is now reaching its limit, capping China's import needs until new facilities are completed.
"Although the market should already have expected that the demand from China's SPR would not last forever, it is hard to predict when this time would come. So, now that it has happened the markets are just factoring this in," said Daniel Ang, investment analyst at Singapore-based brokerage Phillip Futures.
In Japan, commercial weekly crude stocks were down 2.8 percent at 82.87 million barrels. The year-on-year change was a drop of nearly 8 percent.
In the United States, prices fell as American crude stocks were expected to extend their long streak of weekly builds.
"U.S. crude stocks will build through May ... (which) should support bearish sentiment for now," Morgan Stanley said in a note on Wednesday, adding that there was still plenty of storage capacity left for inventory gains.
A poll of eight analysts - taken ahead of weekly reports from industry group the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA) - forecast a crude stock build of 5.1 million barrels on average last week.
The API report on Tuesday showed a slightly smaller build in U.S. crude stocks at 4.8 million barrels for last week. Any build from the more closely watched EIA figures, due later on Wednesday, would confirm U.S. crude stockpiles have hit a record for an eleventh straight week.
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