Oil held losses after tumbling into a bear market as rising global supply offset efforts by OPEC and its allies to drain a glut.
August futures were little changed in New York after front-month prices closed Tuesday more than 20 percent below their February peak. Libya, exempt from the OPEC-led output cuts, is pumping the most in four years while oil stored on tankers reached a 2017 high this month. U.S. crude inventories dropped by 2.72 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show a 1.2 million-barrel decline.
Oil has extended its decline below $44 a barrel to a nine-month low on concerns relentless supply gains from the U.S., as well as renewed output from Libya, is offsetting cuts by the Organization of Petroleum Exporting Countries and partners including Russia. American drillers have added rigs to fields for 22 weeks, the longest run in 30 years, according to Baker Hughes Inc.
“Sentiment is very bearish,” said Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore. “Supply concerns are the major factor underpinning lower oil prices. Rising Libyan output and the high rig count shows that there could be more upside risk to supplies into the year.”
West Texas Intermediate for August delivery was at $43.46 a barrel on the New York Mercantile Exchange, down 5 cents, at 1:51 p.m. in Hong Kong. Total volume traded was about 33 percent below the 100-day average. The July contract expired Tuesday after dropping 97 cents, or 2.2 percent, to $43.23, the lowest close since Sept. 16.
Brent for August settlement traded at $45.91 a barrel, down 11 cents, on the London-based ICE Futures Europe exchange. The contract lost 89 cents, or 1.9 percent, to $46.02 on Tuesday. The global benchmark crude traded at a premium of $2.45 to WTI.
Energy companies led losses among equities in Asia, with the MSCI AC Asia Pacific Energy sub-index dropping 1.3 percent. China Petroleum and Chemical Corp., known as Sinopec, fell 2.4 percent and PetroChina Co. lost 1.6 percent, while Australia’s Santos Ltd. slipped as much as 3.7 percent.
Oil-market news:
Saudi Arabia’s Deputy Crown Prince Mohammed Bin Salman replaced his cousin as heir to the throne, a shock announcement that consolidates the 31-year-old leader’s power in the world’s biggest oil exporter. U.S. gasoline stockpiles increased by 346,000 barrels last week, the API was Tuesday, according to people familiar with the data. Mexico is expected to increase gasoline imports from the U.S. with Pemex’s biggest refinery out of service for at least two weeks.
Recommended for you
