SINGAPORE: US crude stayed below $30 per barrel in Asia on Wednesday as oil price losses deepened on expectations US petroleum stockpiles will rise further and exacerbate the already oversaturated global market.
A rally last week driven by speculation that Russia and members of the Organization of the Petroleum Exporting Countries (OPEC) would reach an agreement to slash output in the oversupplied market has fizzled out amid skepticism such a deal would be reached.
Traders are expecting more bearish news when the US Department of Energy releases its weekly inventory on commercial crude stockpiles later Wednesday, with analysts expecting the inventories to rise.
An increase typically means softer demand in the world’s top oil consumer. At around 3:40 a.m. local time, US benchmark West Texas Intermediate (WTI) for delivery in March slid 18 cents, or 0.60 percent, to $29.70 and Brent crude for April dipped to $32.58 a barrel, down 14 cents, or 0.43 percent.
WTI closed at $29.88 on the New York Mercantile Exchange on Tuesday, the first time the benchmark settled below $30 since January 21.
“With a build of about 4.0 million barrels expected, that’s another event that traders are expecting could push oil prices down,” Michael McCarthy, chief market strategist at CMC Markets, said, referring to the closely-watched US inventory data.
“Some of the selling that we are seeing today is in anticipation of the larger than expected build tonight,” he told Agence France-Presse.
McCarthy added that hopes pinned on coordinated action between Russia and OPEC to slash output have now faded.
“The stepping away from the idea that there might have been cooperation between suppliers is another factor that is weighing on the prices,” he said.