Oil prices slumped on Wednesday (Aug 24) as a surprise jump in US crude stockpiles added to lingering concerns over a global supply glut.
The US Department of Energy said commercial inventories of crude grew by 2.5 million barrels last week, in contrast to analyst expectations for a drop of around 850,000.
That helped reverse gains of Tuesday driven by a report that Iran might support an OPEC output freeze.
In New York, US benchmark West Texas Intermediate crude for delivery in October lost US$1.33 at US$46.77 a barrel.
Brent North Sea crude for October delivery slid 91 cents to US$49.05 a barrel in London trade.
“News of an increase in US inventories has just reminded investors once again about the ongoing oversupply in the markets,” FXTM analyst Jameel Ahmad told AFP.
He added that recent downgrades to global economic growth have meanwhile raised “a few concerns over the possibility of reduced demand for the commodity”.
Crude prices had jumped on Tuesday on a report that Iran could support an effort by OPEC and Russia to freeze production and firm prices.
Members of the Organisation of Petroleum Exporting Countries led by Saudi Arabia are planning to meet next month with major non-cartel producer Russia in Algeria, where they are expected to discuss ways to stabilise the market.
But an Iranian oil ministry source told AFP on Wednesday that the key OPEC member had yet to take any decision on setting an output ceiling or even on taking part in the meeting.
“It is too early to talk of a decision from Iran concerning a freeze in the level of production,” said the source, speaking on condition of anonymity.
“When Iraq and Saudi Arabia are producing at record levels, it is difficult to see Iran being happy to produce well below their potential,” said IG Markets analyst Angus Nicholson.
Courtesy : channelnewsasia
