Singapore: World oil prices fell further in Asian trade on Thursday after the US government reported another rise in crude oil inventories against the backdrop of a possible US recession, dealers said.
New York’s main oil futures contract, light sweet crude for delivery in March, was 22 cents lower at $86.92 a barrel.
The contract closed down $1.27 at $87.14 per barrel Wednesday in the wake of the weekly US inventory report.
Brent North Sea crude for March delivery was 13 cents lower at $87.65 a barrel after settling $1.04 lower at $87.78 in London.
Prices slumped after the US Department of Energy said American crude oil inventories had jumped by 7.0 million barrels in the week ending 1 February, the fourth straight rise in crude stocks.
The increase was much higher than analysts’ consensus forecast which had predicted a gain of 2.2 million barrels.
US gasoline, or petrol, stockpiles increased by 3.6 million barrels, which also beat market expectations calling for a 1.7-million-barrel rise.
David Moore, a commodities strategist with the Commonwealth Bank of Australia in Sydney, said the inventory build comes against concerns for the United States economy.
“Our belief is the US won’t actually go into a recession,” but the oil market thinks it will, he said, and that has put downward pressure on prices.
The United States is the world’s biggest oil consumer, so slowing US growth can have a knock-on effect on global crude prices.
“It may be that there is a slight soft touch to oil in the near-term,” Moore said.
Prices are “still under pressure from persistent economic jitters,” Sucden analyst Andrey Kryuchenkov said earlier.
On Wednesday Iran’s Oil Minister Gholam Hossein Nozari said the country’s crude output hit its highest peak since the 1979 Islamic revolution, the official IRNA agency reported.
“Yesterday we reached a record of oil output since the Islamic revolution with production of 4.184 million bpd (barrels per day) of oil,” Nozari was quoted as saying.
Iran is a key member of the Organization of the Petroleum Exporting Countries (Opec) cartel.
At a time of rising crude inventories, Moore said the Iranian news could be another factor weighing on demand.