Comments
Brent crude oil fell towards $58 a barrel on Tuesday ahead of key industry data expected to show further builds in US inventories due to heavy over-supply.
A Reuters survey forecast figures from the American Petroleum Institute on Tuesday, and the US Department of Energy's Energy Information Administration, due to be published on Wednesday, would show US crude stocks increased by 4 million barrels to a record high last week.
Brent futures for April were down 50 cents at $58.40 a barrel by 0910 GMT, while US crude was down 50 cents at $48.95.
"The fundamental backdrop is still bearish," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, adding that there was a "huge over-supply in the market".
"We expect another strong increase in US crude inventories to be reported," he said.
Huge increases in domestic oil production have left the US oil market with a fuel glut, one exacerbated by a refinery strike, that has squeezed demand for crude oil.
The United States is in its fourth week of its largest refinery strike for 35 years, affecting 12 refineries accounting for a fifth of national production capacity. Talks to end the strike are not expected to resume this week.
"Spreads for crude oil are becoming severely altered by the refinery strikes," analysts at Singapore brokerage Phillip Futures said in a note to clients, saying that the strike had reduced demand for U.S. crude and helped widen its discount below Brent, the North Sea benchmark.
The spread between Brent and US crude stood at $9.45 a barrel at 0910 GMT, after hitting $10.27 on Monday, its widest since March 2014.
No OPEC meeting before June
A report in the Financial Times on Monday quoted Nigeria's oil minister as saying the country would call an OPEC extraordinary meeting if prices dropped further, offering some support to oil prices.
But a delegate to the Organization of the Petroleum Exporting Countries told Reuters on Tuesday that the producer group had no plans to meet before June.
Analysts said an emergency OPEC meeting was not expected.
"I don't think that OPEC is going to do anything," Commerzbank's Fritsch said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.