NEW YORK (Reuters/Web Desk) – Oil prices fell on Wednesday to their lowest in over three months, after industry data showed a steep build in US crude supplies, while mixed Chinese economic data raised worries about global demand for crude. Earlier on Tuesday, the oil prices had declined more than 4 per cent.
Brent crude futures dropped 25 cents to $81.36 a barrel by 0001 GMT, while US crude (WTI) futures fell 35 cents to $77.02 a barrel. Both declined to the lowest since July 24 in early Asia trade.
Read more: Oil prices down 6pc in a week as supply disruption fears ease
The latest decline comes as both benchmarks settled down more than 6pc last week, with Brent at $84.89 a barrel and WTI falling to $80.51, which translates into another over $3 loss this week so far.
It means the announcement made by top oil exporters Saudi Arabia and Russia on Sunday to continue with their additional voluntary oil output cuts until the end of the year isn’t working.
On the other hand, this trend can provide much-needed relief to Pakistan where record-high inflation has resulted in an unprecedented cost of living crisis. But the recent rupee depreciation may nullify or minimise the possible cut in the petrol and diesel prices.
US crude oil stocks rose by almost 12 million barrels last week, market sources said late Tuesday, citing American Petroleum Institute figures.
The US Energy Information Administration (EIA) will delay the release of weekly inventory data until the week of Nov. 13. Crude oil production in the United States this year will rise by slightly less than previously expected while demand will fall, the EIA said on Tuesday.
The EIA now expects total petroleum consumption in the country to fall by 300,000 bpd this year, reversing its earlier forecast of a 100,000 bpd increase.
Data in China, the world's biggest consumer of oil, also raised doubts about the demand outlook.
Crude oil imports by the world's second-biggest economy in October showed robust growth but its total exports of goods and services contracted at a quicker pace than expected, adding to fears of lower global energy demand.
Adding to pressure on oil prices was a modest recovery in the US dollar from recent lows, which makes oil more expensive for holders of other currencies.