NEW YORK (Reuters) - Oil prices fell again on Wednesday as concerns of a growing global supply glut negated optimism in recent weeks about declining U.S. production.
Crude futures have lost 7 percent so far this week, sliding without stop since Monday after OPEC reportedly pumped 110,000 barrels per day more in September than in August, and nearly 2 million bpd above forecast demand for 2015.
In comparison, U.S. shale oil production is expected to fall by 93,000 bpd in November, the U.S. Energy Information Administration (EIA) forecast.
More immediately, U.S. crude stockpiles likely rose by almost 3 million barrels last week, analysts polled by Reuters said, as refinery runs declined from autumn maintenance works. The American Petroleum Institute will issue preliminary stockpiles data at 16:30 EDT, before official inventory numbers from the EIA on Thursday. [EIA/S]
Brent, the global benchmark for crude, was down 33 cents, or 0.6 percent, at $48.91 a barrel by 12:19 p.m. EDT.
U.S. crude slipped 47 cents, or 0.8 percent, to $46.19 a barrel.
“We see some renewed selling as this week proceeds,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
He said weakness in the gasoline crack - the profit refiners get for turning crude into gasoline - was weighing on the petroleum complex. The crack has fallen by a third of its value, or nearly $4 a barrel, over the past two weeks.
Weaker energy demand projected for China, the world’s second largest economy, also was hurting crude. China’s growth for the third quarter is expected to fall below 7 percent for the first time since the 2007-2009 financial crisis.
OPEC trimmed its estimate of 2016 world oil demand growth by 40,000 bpd to 1.25 million bpd, citing slower Chinese growth.[OPEC/M]
Vessels were storing more crude at sea as storage on land was filling up and there were no quick customers, cargo trackers said.
“Oil is being left on ships because there is nowhere to put it,” said Matt Smith, a Houston-based analyst at Clipper Data, which tracks international crude loadings.
The International Energy Agency, an energy watchdog for the West, says oil would remain oversupplied in 2016.
“Despite the progress made in stimulating demand and discouraging non-OPEC supply, oil producers will face another year of severe pain if Iranian sanctions are lifted early next year and other OPEC members do not make way” to cut output, said David Hufton at London-based oil brokers PVM.
Additional reporting by Alex Lawler in London and Meeyoung Cho in Seoul; Editing by Jason Neely, David Evans, Andrew Hay and Paul Simao