US crude stockpiles climbed for a fourth week through October 16, the longest run of gains since April, keeping inventories more than 100 million barrels above the five-year seasonal average, EIA data show.
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U.S. benchmark West Texas Intermediate (WTI) for delivery in December fell 62 cents, or 1.4 percent, to $43.98 a barrel on the New York Mercantile Exchange.
Brent crude oil was down about 0.6 percent from Friday’s close to trade at $47.70 in early Monday trading.
The oil market has been volatile in recent months amid uncertainty about how quickly the global glut of crude is set to shrink.
“It’s still the supply glut weighing on crude and the products are going to be a bit volatile with options expiration”, said Phil Flynn, analyst at Price Futures Group in Chicago.
On its upstream business, BP said it expected “slightly higher” oil and gas production in the fourth quarter following the end of seasonal maintenance, although its Q3 production benefited from an absence of adverse weather in the US Gulf of Mexico. The crack spread between gasoil and Brent is again nearing its mid-October lows of $11 per barrel.
The country’s export drive has pushed down Asian diesel oil prices in the Singapore market since July, which fell to the $52 range in late August, their lowest since March 2009.
With depressed oil prices, the downstream segment, or refining segment to be precise, posted huge profits.
Investors await the outcome of this week’s two-day policy meeting of the US Federal Reserve, just days after China’s surprise fourth interest rate cut this year sent shockwaves through markets.
Crude oil prices continued to trade in low range amid sagging demand and its bleak outlook for remaining part of 2015.
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For markets to rally further we would probably need to see the Fed definitively push their first rate hike out into 2016 in the dot plots and the BoJ step up its monetary stimulus.
