Oil prices dropped 1 percent on Tuesday, extending losses from the previous session as reports of a big climb in US inventories and forecasts of record shale output stoked worries about oversupply, Trend reports citing Reuters.
Concerns around future oil demand amid weakening global economic growth and doubts over the impact of planned OPEC-led production cuts were also pressuring prices, traders said.
International Brent crude oil futures were at $58.95 per barrel at 0141 GMT, down 66 cents, or 1.11 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were down 40 cents, or 0.8 percent, at $49.48 per barrel.
Both US crude and Brent have shed more than 30 percent from early October amid swelling global inventories, with WTI currently trading at levels not seen since October 2017.
“OPEC is reducing production to attempt to rebalance. However, data from Cushing still shows an oversupply,” said Hue Frame, portfolio manager at Frame Funds.
“This isn’t being viewed favorably by the market, especially in combination with slow global growth.”
Inventories at the US storage hub of Cushing, Oklahoma, rose by more than 1 million barrels from Dec. 11 to 14, traders said, citing data from market intelligence firm Genscape on Monday.
Meanwhile, oil production from seven major US shale basins is expected to climb to 8.03 million barrels per day (bpd) for the first time on record by year-end, the US Energy Information Administration said on Monday.
With oil prices now falling, unprofitable shale producers will eventually stop operating and cut supply, but that will take some time, analysts said.
“We need to see sustained lower prices for producers to reduce their output levels, and we see prices will maintain low levels through 2019,” said Sydney-based Frame.