US crude oil inventories were at 522.5 million barrels as of July 29, a historically high level for this time of year, the EIA said.
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West Texas Intermediate for September delivery was at $40.08 a barrel on the New York Mercantile Exchange, up 2 cents, at 1:58 p.m. Hong Kong time.
Global fuel inventories are brimming as refineries have churned out huge volumes of diesel, gasoline and jet fuel but the supply glut has diminished refining margins and demand failed to keep up with supply.
Hot from the weakest month in a year in July, global oil futures started August on a similar note, losing 3%, falling under $US40 a barrel in NY, and dipping into bear territory.
Brent for October settlement was 40 cents higher at $42.20 a barrel on the London-based ICE Futures Europe exchange. Ironically, this could also place downward pressure on oil prices.
Oil prices tumbled Monday below $40 per barrel for the first time since April, with both Brent and U.S. crude prices falling by almost four per cent.
The last time oil settled below the US$40 threshold was on April 18, when it was US$39.78.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest United States oil-storage hub, dropped by 1.3 million barrels last week, the API said Tuesday, according to a person familiar with the figures.
But there are predictions that the current level of low oil prices won’t last.
Anticipated production pickups in Nigeria and Libya, where politically related supply disruptions are being resolved, will also keep the world swamped in surplus barrels, they say.
Preliminary weekly production data showed that U.S.’ crude production fell flat to less than 8.5 million bpd.
Figures released on Friday by the oilfield services company Baker Hughes showed its worldwide rig count for July was 1,481, up 74 from the 1,407 counted in June 2016 although still down 686 from the 2,167 counted in July 2015. Refinery rates and crude imports rose.
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Crude production in the US fell by 55,000 bpd to 8.46 million, the first decline in four weeks.
