Brent crude, the global oil benchmark, fell 1.14 percent to $48.63 a barrel on London’s ICE Futures exchange.
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Shares of the world’s biggest oil companies are tumbling to multi-year lows on new data showing that U.S. crude inventories continue to rise at a time of year when they are typically in decline.
“I really don’t see the Cushing or Gulf Coast storage tank-topping scenario in 2015 but more of a possibility in first-quarter 2016”, said Scott Shelton, commodities specialist at ICAP in Durham, North Carolina. “I don’t see anything good in this report“. EIA’s updated projection remains subject to significant uncertainties: the pace and volume at which Iranian oil reenters the market, the strength of oil consumption growth, and the responsiveness of non-OPEC production to low oil prices. In volatile trading, the Shanghai Composite Index SHCOMP, +1.23% was last down 2%.
Nymex oil futures have been under heavy selling pressure in recent months as worries over high domestic U.S. oil production weighed.
The Energy Information Administration said there were 456 million barrels in commercial inventories as of Friday. As oil is traded in the US currency, a strong dollar makes it more expensive for worldwide investors, dampening demand.
The latest data has only confirmed that fear and exacerbated a selloff that has put oil in a bear market for the summer, said Dean Hazelcorn, trader at the brokerage Coquest Inc.in Dallas.
Smith pointed to the WTI rebound ahead of the American Petroleum Institute’s weekly oil data report, saying the consensus estimate was for a decrease of two million barrels in US crude inventories.
“After selling precipitously over the last several days, oil prices were technically stretched and oversold on a near-term basis, leading to a bounce into the close”, said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
Gasoline stockpiles fell by 2.7 million barrels.
Refinery inputs to distillation units slipped 1 per cent to 17.1 million barrels a day. A gallon of gasoline at the pump could fall below $2 by the end of the year, analysts estimated. The figure was 2.62 million barrels higher than it was the previous week, and disappointing to economists who had been expecting a decline of 820,000 barrels.
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Georgi Kantchev contributed to this article.
