The price of USA oil fell nearly 2 percent and reached its lowest level since the market turmoil of late August.
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ENERGY: Oil prices fell back after soaring the day before when Pemex, the national oil company of Mexico, said it received permission to swap crude oil with the US, possibly ending the USA ban on exporting crude.
Brent December crude was up $2.09 at $48.90, after trading from $46.61 to $49.23.
Oil climbed the most in eight weeks in New York as increasing US refinery activity signalled the end of seasonal maintenance and higher crude demand.
Resource stocks tumbled across the region as USA crude fell over 1 percent, extending losses from Monday’s 1.4 percent loss and on course for a third week of losses.
The IEA (International Energy Agency) estimates that global crude oil consumption could rise to 1.8 MMbpd (million barrels per day) in 2015. Bank of Japan policymakers are also meeting on Friday and are expected to leave the door open to additional monetary stimulus.
“Sweet crudes in Europe are going through a rough patch at the moment, as evidenced by the number of regional and (West African) sweet crude differentials slipping into negative territory against Dated Brent”, energy consultants JBC Energy said in a report.
Oil prices could get support from short covering if investors think the Fed will take a dovish view towards interest rates at its meeting, Spooner said.
USA commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.4 million barrels from the previous week.
The bearish outlook led more speculators to sell out of long positions on crude oil, with holdings slipping by 18,597 contracts last week to 184,939 lots, InterContinental Exchange data showed.
A strong USA currency will make the dollar-denominated commodity more expensive for holders of weaker units, hurting demand and prices.
Total products supplied over the last four-week period averaged over 19.5 million barrels per day, up by 1.0% from the same period a year ago. Gasoline and distillate fuel stockpiles in the week ended October 23 are expected to have declined.
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Stockpiles at the Cushing, Oklahoma delivery hub for USA futures fell 785,000 barrels, giving a bullish tone to the report. Natural gas futures shed 3.59 percent at $2.286 per million British thermal units (mBtu) indicating the worst close since 2012. The Standard & Poor’s 500 index lost 5.29 points, or 0.3 percent, to 2,065.89.
