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Another build in crude stocks - what will this afternoon bring? (Brent: $47.3)

Oil prices were down again yesterday as weekly oil stock data from the American Petroleum Institute showed another crude oil build - 2.1 mio. barrels. Now the official report from the Energy Information Administration (EIA) this afternoon will be followed closely for confirmation of this trend and we expect some volatility around the publishing.

Adding to excess supply concerns was inflation data from China - the Producer Price Index - which measures the change in the price of goods sold by manufacturers. It fell to -5.9% from -5.4%; the lowest in around 6 years.

Yesterday, the EIA revised its expectations to U.S. oil production for 2015 and 2016 down; to 8.96 mio. barrels per day in 2016; August 2015 output is down 140,000 barrels per day compared to previous month. It is mainly the current low prices which make shale oil producers cut investments and lay off a number of oil workers. The EIA also lowered the outlook for demand growth to 130,000 bpd in 2016, 2015 levels expected to rise by 330,000 bpd.

On the economic data front, today sees interest rate decision in the UK, U.S. export/import price indices and weekly jobless claims. Financial markets are looking ahead to next week's Fed meeting and are following any hints of interest rate hike/no hike.