SINGAPORE (Web Desk/APP) – Oil prices extended losses in Asia Tuesday on expectations of a rise in US crude inventories and following forecasts that a global supply glut will persist into next year.
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The US Energy Information Administration (EIA) will release Wednesday its weekly report on the country´s commercial crude inventories for the week ending October 23, which is seen as a gauge for demand in the world´s top oil consuming nation. Analysts expect another build-up, Geo News cited.
“Oil prices remain near two-month lows as oversupply issues stay in the forefront… Fundamentals re-exerted themselves,” Bernard Aw, market strategist at IG Markets in Singapore, told AFP.
“There is a belief that US inventories are on the rise, which would prolong the global glut,” he said.
“The EIA on Wednesday will provide colour to the view.”
In Asia, US benchmark West Texas Intermediate (WTI) for December delivery was trading 63 cents lower at $43.35 and Brent eased 43 cents at $47.11 a barrel at around 0300 GMT.
Both contracts were down on Monday after stretching losses into a second week on Friday.
The losses came after Fatih Birol, executive director of the International Energy Agency, said at an energy conference in Singapore on Monday that it saw “ample supply in the market” until mid-2016.
Prices fell to six-year lows in August but bounced back earlier this month to trade above $50, lifted by upbeat comments on the demand outlook from the head of the OPEC cartel of crude producers.
The rally however was not sustained as oversupply concerns resurfaced. Current price levels are more than 50 percent below peaks of more than $100 reached in June last year.