Global oil benchmark, Brent crude, extended its declines on Thursday, hitting its lowest level since December, as the United States’ crude inventories surged to a new record high.
The rise in the US output has continued to feed concerns that the supply glut in the global markets could persist even with output cuts by the Organisation of Petroleum Exporting Countries.
The US West Texas Intermediate benchmark on Thursday dipped below $49 per barrel for the first time since late November.
Brent, against which half of the world’s oil is priced, was down by 2.3 per cent to $51.89 per barrel, its lowest level since early December.
The WTI crude, the US marker, lost as much as three per cent to $48.79 per barrel, having fallen to a low of $50.05 on Wednesday, a decline of almost six per cent, although it closed above those lows.
In later trading on Thursday, the WTI was at $49.04, down 2.5 per cent on the session, according to Financial Times.
Stockpiles of the US crude climbed by 8.2 million barrels in the week ended March 3, and have risen every week this year, according to the latest data from the US Energy Information Administration.
The data came after Saudi Arabia’s Energy Minister, Khalid al-Falih, said a deal among global producers to cut supply and lower stockpiles was not making as quick an impact as initially anticipated.
He added that the agreement was only helping to revitalise the US shale industry.
Oil prices have been supported by a supply cut that started on January 1, 2017 by OPEC plus Russia and other non-members. Data has suggested high compliance with the deal.
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