NEW YORK: Oil, which closed at a seven-month low in New York on Tuesday, slipped further after an industry report was said to show a larger-than-expected increase in US crude inventories.
Futures fell after the industry-funded American Petroleum Institute was said to report US crude stockpiles expanded by 7.83 million barrels last week.
If confirmed by the Energy Information Administration on Wednesday, that would be the biggest build in five weeks, compared with an average 2 million-barrel increase in a Bloomberg survey of analyst forecasts.
“If EIA confirms this build, it could certainly lead to further price weakness,” said Kyle Cooper, director of research at IAF Advisors. “This would mean that we haven’t found the bottom.”
Crude has tumbled almost 20% since touching a four-year high last month as bearish supply signals around the globe crowded out concerns about disrupted exports from Iran and Venezuela.
US government waivers will allow some of Iran’s biggest customers to buy crude from Opec’s No. 3 producer for another six months, damping shortage fears.
The waivers announced this week by US Secretary of State Mike Pompeo apply to China, India and six other nations.
West Texas Intermediate crude for December delivery traded at US$61.79 (RM258.28) a barrel at 4.38pm in New York after ending the session at US$62.21 on the New York Mercantile Exchange, the lowest close since April 6.
Total volume traded was about 20% above the 100-day average.
Brent futures for January settlement fell US$1.04 to close at US$72.13 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a US$9.79 premium to WTI for the same month.
The API was also said to report that inventories at the key pipeline hub in Cushing, Oklahoma, rose by 3.07 million barrels last week. Gasoline and distillate supplies both fell, according to the data.