Oil prices slipped for a fourth straight day to fresh three-month lows Wednesday as worries about a global oversupply resurface ahead of a report on US stockpiles later in the day.
With the US summer driving season – when demand peaks – drawing to a close, investors are growing increasingly concerned that stocks in the world’s top crude consumer remain at elevated levels.
The Energy Information Administration is due to release a report Wednesday, with a survey of analysts warning gasoline inventories rose in the previous week, while oil supplies dipped for a tenth week.
The EIA last week reported a smaller-than-forecast drop, which sparked a sell-off in the commodity.
On Wednesday at around 0315 GMT, US benchmark West Texas Intermediate was down eight cents at $42.84 while Brent fell eight cents to $44.79.
“The general driver behind the negativity seems to be the excess crude and gasoline stockpiles,” Angus Nicholson, a markets analyst at IG Ltd in Melbourne, said.
“The market is very much in a down trend and it doesn’t look like it’s going to reverse at the moment. There is some key technical support around $40 a barrel.”
Adding to the downward pressure was a pick-up in the dollar following a series of strong US economic figures as well as an increase in the number of rigs coming online, meaning more production.