Oil prices marked their third day of declines on Wednesday, weighed down by expectations of higher US crude supplies.
Global benchmark Brent futures fell by 0.9 percent to $62.12 per barrel. It has dropped 11 percent since hitting a record above $71 last month. Brent has also lost all of its 2018 gains.
US West Texas Intermediate (WTI) crude futures edged lower by 1.3 percent to $58.38 a barrel.
Soaring US inventories and signs of rapidly rising crude output mainly triggered the losses. Oil prices have shed about 10 percent in the previous week and have yet to recover those losses.
Analysts said that prices so far were unable to get back up after last week’s slump, which raised the risk of a further price slide.
Rising US Crude Inventories
Oil prices have been in an unfavorable position lately, as investors grew concerned over growing US production levels.
Industry group the American Petroleum Institute (API) reported on Tuesday that crude inventory for the week ending February 9 added 3.9 million barrels to 422.4 million.
That was mostly due to mounting US oil output, which has increased over 20 percent since mid-2016 to more than 10 million barrels per day (bpd). The figure surpasses even the world’s biggest exporters Saudi Arabia and Russia.
That further supported the possibility of the US output hindering the Organization of the Petroleum Exporting Countries’ (OPEC) efforts to help the market restrain excess supplies.
Gasoline stocks also rose by 4.6 million barrels, while distillates showed a buildup of 1.1 million.
Oil analyst Joel Hancock stated that API ended up bearish and that is affecting the markets. He added that it was all very seasonal and was to be expected.
Still, there are often sharp differences between API estimates and the official data from the US Energy Information Administration (EIA).
The EIA is set to present its official oil supplies report later in the day. Analysts and traders are expecting an increase of 2.6 million barrels.
Supplies have started to climb again this month after weeks of declines. At the same time, traders are growing more and more worried over the impact of higher US shale production on the market.
The International Energy Agency (IEA) expects oil demand to rise by 100,000 bpd to 1.4 million bpd this year.
However, IEA cautioned the rapid growth in supply worldwide, especially in the US, could exceed consumption, which is likely to further pressure prices.
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