NEW YORK (Bloomberg) -- Oil fell after the biggest gain in three months as U.S. industry data showed the nation’s crude stockpiles increased, adding to concerns about oversupply.

 

Futures lost as much as 1.6% in New York. Inventories rose 2.2 MMbbl last week, the American Petroleum Institute was said to report. Middle East production has climbed to a record while U.S. output slumps, a sign that OPEC’s strategy of defending market share is succeeding, the International Energy Agency said in its monthly oil market report.

 

Oil has traded between $44 and $51 in the last month after almost doubling from a 12-year low in February amid supply disruptions from Canada to Nigeria and falling U.S. output. The rate of decline in non-OPEC supply will slow next year, the Organization of Petroleum Exporting Countries said in a report.

 

“When the macro dust settles, which might take a while, it will become apparent that oil fundamentals are weaker than many realized,” said Julius Walker, senior consultant at JBC Energy in Vienna. “While our base case is for crude prices to remain close to $50, we now see a real risk of prices temporarily heading closer to $40.”

 

West Texas Intermediate crude for August delivery fell as much as 73 cents to $46.07/bbl on the New York Mercantile Exchange, and was at $46.27 at 10:46 a.m. London time. The grade increased $2.04 to settle at $46.80 on Tuesday, the biggest one-day gain since April 8. Total volume traded was about 10% above the 100-day average.

 

U.S. Supplies

 

Brent for September settlement slid as much as 1.9% to $47.56/bbl on the London-based ICE Futures Europe exchange. The contract advanced $2.22, or 4.8%, to close at $48.47/bbl on Tuesday. The global benchmark crude traded at premium of 79 cents to WTI for September delivery.

 

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, dropped 166,000 bbl last week, the API said, according to a person familiar with the figures. Nationwide supplies are forecast to decline 3 MMbbl in the week ended July 8, according to a Bloomberg survey before Energy Information Administration data Wednesday.

 

The EIA increased its U.S. crude output forecast for 2017 to 8.2 MMbpd from the 8.19 MMbpd projected in June, according to the monthly Short-Term Energy Outlook released Tuesday. Production in 2016 will be 8.61 MMbopd, up from the 8.6 MMbopd in last month’s report.