London, United Kingdom — New York oil prices approached six-year lows Tuesday on worries over growing US stockpiles and after OPEC warned of a stubborn global supply glut, analysts said.
US benchmark West Texas Intermediate (WTI) for April delivery slid to $42.63 a barrel — touching the lowest level since March 11, 2009. It later stood at $42.70, down $1.18 from Monday’s close.
Nearing midday in London, European benchmark Brent North Sea crude for May delivery fell $1.14 to $52.80 a barrel.
Crude futures also dropped Monday on worries over growing US oil inventories, which already stand at record-high levels adding to the global oversupply.
In addition, the market fell sharply after OPEC questioned the strength of last month’s rally, saying in a report that the price increase came “despite the fact that global supply continued to exceed demand”.
Traders are now eagerly awaiting Wednesday’s weekly US government report on crude reserves for the week to March 13.
“Growing concerns that US crude stockpiles would see additional builds this week pushed prices lower,” said Sucden analyst Kash Kamal.
A Bloomberg News survey showed US crude stockpiles are expected to have increased by 3.3 million barrels to 452.2 million last week.
US crude stockpiles have risen for nine weeks in a row to reach a record 448.9 million barrels on March 6.
Singapore’s United Overseas Bank said the recent price decline was due to “concerns that US crude supplies are at record levels and continue to build up”.
World oil prices have collapsed by more than half since June last year on mounting US supplies, weak global economic growth and OPEC’s decision to keep output high despite falling prices.
Leading US energy producers have curtailed some investment, resulting in lower weekly rig counts.
Despite the reduced drilling, Goldman Sachs estimated Monday that US output would still grow by 230,000 barrels a day in the fourth quarter of 2015 compared with a year ago.