LONDON (Reuters) - Brent crude oil slipped below $66 a barrel on Wednesday, just above a five-year low, on mounting signs of oversupply and lackluster demand as global economic growth falters.
The price of the North Sea oil benchmark has fallen more than 40 percent since June as new supplies of high-quality crude from North America have fed a glut of fuel in many parts of the world.
Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude oil inventories rose by 4.4 million barrels last week to 377.4 million barrels, compared with analysts’ expectations of a drop of 2.2 million.
U.S. gasoline and distillate stocks also showed big builds, the API said.
Brent futures for January LCOc1 fell to a low of $65.68 a barrel, down $1.16, before recovering slightly to trade around $65.90 by 0850 GMT (03:50 a.m. EST). The contract reached $65.29 on Tuesday, its lowest since September 2009.
U.S. crude futures CLc1 were down $1 at $62.82 a barrel.
“Almost all the news flow points to a weaker market,” said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.
“We have had very bearish API data with large stock builds across the board, and also a very bearish Short-Term Energy Outlook from the EIA, with a sharp reduction in demand growth forecasts for next year.”
The U.S. Energy Information Administration cut its global oil demand growth estimate for 2015 by 240,000 barrels per day (bpd) to 880,000 bpd. It forecast oil demand growth this year would be around 960,000 bpd.
Global oil demand has been capped by slowing economic growth in China as well as stagnation in many more-developed economies, particularly in Europe.
“The fundamental picture hasn’t really changed, and that is one of supply outstripping demand growth for most of the year,” said Phin Ziebell, a senior analyst at National Australia Bank.
“It’s an incessant march downwards, and it would be interesting to see where it bottoms out, but there doesn’t seem to be any sign of it so far.”
Members of the Organization of the Petroleum Exporting Countries (OPEC) are divided on how to respond to the global surplus and falling prices. The cartel may still hold an emergency meeting before its June gathering, Algeria’s energy minister said on Tuesday.
Top oil producer Saudi Arabia blocked production cuts at the last meeting in November and has taken steps to shore up its market share.
Additional reporting by Adam Rose in Beijing; Editing by Dale Hudson