London: Crude oil prices struck a four-month low Tuesday on fears of a growing stockpiles glut in top consumer the United States, and as dealers also eyed the rebounding dollar.
New York’s main contract West Texas Intermediate (WTI) for delivery in December sank to $93.41 per barrel — which was the lowest level since June 24. It later stood at $93.66, down 96 cents from Monday’s close.
Brent North Sea crude for December dipped 35 cents to $105.88 a barrel in late afternoon trade.
Analyst Fawad Razaqzada, at trading firm GFT, said that the market was hit by “ongoing concerns over rising US crude inventories and (the) weaker global demand outlook”.
He added: “Underscoring the demand worries, the European Commission today cut its 2014 forecast for economic growth in the eurozone and raised its estimate for unemployment.”
In addition, a better-than-expected reading on the US services industry pushed the dollar higher, in turn weighing on oil prices.
A rising greenback makes dollar-denominated oil more expensive for buyers using cheaper currencies.
Later on Tuesday, meanwhile, industry body the American Petroleum Institute will publish its weekly oil inventory data.
And on Wednesday, the US government’s Energy Information Administration will issue its official snapshot of crude reserves for the week ending November 1.
Crude inventories in the United States have climbed for the past six weeks, to about 28 million barrels, raising concerns about oversupply in the world’s largest economy and top crude consumer.
WTI is trading below the $95 threshold after falling for four consecutive sessions last week under pressure from the build up in crude stockpiles, before rising slightly on Monday.
Libyan oil production levels also remain in focus, analysts said.
Talks between Libyan authorities and protesters blockading oil terminals have reached a deadlock after three months, prolonging a crisis that has cost the increasingly volatile country an estimated $13 billion.
The protests have caused an 80-percent drop in production in a country that is almost entirely dependent on oil and gas for its foreign exchange earnings, and which is struggling to impose order after the 2011 revolution that toppled Moamer Kadhafi.
Security guards from the oil installations have been on strike since the end of July, blockading the country’s main terminals at Zueitina, Ras Lanouf, and Al-Sedra in eastern Libya, where the Arab Spring-inspired uprising began.
Light Libyan crude is used by refiners in Europe and the sharp cuts to production forced by several months of protests has driven up prices for alternatives like Brent.
Estimated unplanned production losses from OPEC countries in October were around 2.3 million barrels a day — almost half of which were a result of Libya, EIA data showed.
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