It earlier plumbed $40.18, the lowest since April 20.
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Both WTI and Brent held losses in post-settlement trade after preliminary inventory data from trade group American Petroleum Institute (API) showed that USA crude stockpiles fell 1.34 million barrels last week, largely within expectations.
Futures rose as much as 0.9% in NY after slipping 5% the previous two sessions. That wrecked refining margins and hurt the earnings of Exxon Mobil Corp, BP Plc and Royal Dutch Shell Plc.
In South Korea, July exports fell at the fastest pace in three months, far worse than expectations, contracting 10.2 per cent on-year to $41.05 billion.
U.S. West Texas Intermediate (WTI) crude CLc1 settled down 55 cents, or 1.4 percent, at $39.51 a barrel, after earlier rallying to $40.91.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, dropped by 1.3 million barrels last week, the API said Tuesday, according to a person familiar with the figures.
Societe Generale SA said it expects the current downward correction in oil prices will bottom out in the high-$30 range.
“In the last 72 hours, there have been reports of successful negotiations to re-open blockaded oil terminals in Eastern Libya and US airstrikes against Daesh (ISIS) in Sirte”. Based on estimates by industry group American Petroleum Institute, U.S. crude supplies decreased 1.3 million barrels in the week ended July 29. The global benchmark was at a premium of $1.47 to WTI for October.
Brent joined WTI in a bear market Tuesday, with both crudes down at least 20% from their June highs on signs that the global supply glut will take longer to trim. US crude inventories rose to 521.1 million barrels through July 22, keeping supplies more than 100 million barrels above the five-year average, Energy Information Administration data show.
On Wednesday morning ET, the Energy Information Administration (EIA) will release official USA crude oil inventory data.
Bloomberg carried out further surveys by interviewing analysts and asking them where they think oil prices will be at by 2017.
Vincent Piazza, senior energy analyst at Bloomberg Intelligence, said this “wall of output” should keep a limit on oil prices.
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However, other analysts said recent price falls were overblown, with Citi saying bears, who speculate on falling prices, having “gone wild in oil at $40”.
