By Dan Strumpf 
 

Oil futures slipped in early Asian trading Wednesday, extending a week-long pullback as investors assessed the scale of the global supply glut.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $43.57 a barrel, down eight cents in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell nine cents to $44.88 a barrel.

The move puts oil prices on track for a fourth consecutive session of declines. Nymex and Brent crude are both down more than 5% from their highs of the year reached last week, amid signs of persistent high production around the world and lofty inventory levels in the U.S.

Elevated U.S. stockpiles, a major contributor to the nearly two-year-long oil rout, are expected to continue creeping higher. Analysts expect a rise in U.S. stockpiles by 1.2 million barrels in key data for last week from the Department of Energy due Wednesday at 10:30 a.m. ET. The rise would bring stockpiles to a new weekly record. Data from an industry group released Tuesday showed inventories rose 1.3 million barrels last week.

While crude retreated from recent highs, many analysts said that production cuts spurred by low prices are likely to keep a floor under the market in the near term. Analysts at BMI Research in a Wednesday report upgraded their forecast for Brent and Nymex crude prices, citing the prospect of production cuts by U.S. shale producers as well as by countries in the Organization of the Petroleum Exporting Countries.

"We remain bullish on oil prices over the next three to six months as prices remain locked in a resilient uptrend and market oversupply will continue to rebalance," the analysts wrote. They now expect Brent crude to average $46.50 a barrel this year, up from $40 earlier. They expect Nymex crude to average $46 a barrel, up from $39.50.

Prices are likely to remain capped at around $55 a barrel, calling it the breakeven price for a large portion of global production, the research firm said.

Elsewhere, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 0.26 cents to $1.5126 a gallon, while June diesel traded at $1.3367, 0.33 cents higher.

ICE gasoil for May changed hands at $397.25 a metric ton, up $3.25 from Tuesday's settlement.

Write to Dan Strumpf at daniel.strumpf@wsj.com

(END) Dow Jones Newswires

May 03, 2016 23:32 ET (03:32 GMT)