Oil Prices Down on U.S. Stockpiles Surge, OPEC Reports

Crude prices fell in Asia Thursday following an unexpected surge in U.S. stockpiles and reports that the OPEC oil cartel is unlikely to slash production when it meets in November.

U.S. benchmark West Texas Intermediate for October delivery dipped 63 cents to $93.79 while Brent crude for November eased 62 cents to $98.35 in afternoon trade.

Prices were under pressure "after the U.S. Department of Energy reported an unexpected increase of U.S. crude inventories by 3.7 million barrels instead of the market forecast for a 1.2 million decline," said Singapore's United Overseas Bank (UOB) in a market commentary.

Gasoline stocks dropped 1.6 million barrels in the week to September 12, the data showed.

UOB said oil prices also took a hit after "conflicting reports" about the plans of the Organization of the Petroleum Exporting Countries (OPEC) to cut its output in November due to a global supply glut and weak demand.

OPEC secretary general Abdullah El-Badri said Tuesday the cartel would cut output in November, which helped lift prices from a two-year low.

But a Dow Jones Newswires report Wednesday, citing unnamed OPEC delegates, said the organisation was unlikely to cut in November.

A stronger dollar added downward pressure on oil, which is traded in dollars and becomes more costly for buyers using weaker currencies.

The greenback rose after the Federal Reserve stuck to its timetable on hiking interest rates but indicated they could eventually rise more sharply than initially envisaged.

Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy EY, said investors would next be scrutinizing manufacturing data out of China and Germany on Tuesday for clues about global demand.

If the economic data from these two countries was lower than forecast, oil prices "may head lower in the near term", said Gupta.