Oil stretched declines into a fifth session — touching the lowest since early July — as a flood of US exports and doubts over whether OPEC+ will be able to deliver on its planned production cuts raised concerns about oversupply.
Global benchmark Brent dipped to trade below $77 a barrel after slumping by more than 7 per cent over the previous four sessions.
American crude shipments are nearing a record six million barrels a day, according to estimates from ship-tracking firms, the latest indication of how ample supplies of US crude are weighing on markets across the globe.
Reflecting the weakness, Saudi Arabia reduced its official selling prices to Asia by the most since February.
Still, the cuts were less than expected, and falling spot market prices could see some Asian crude buyers turning elsewhere for their supply as they considered taking fewer shipments from the kingdom for January.
OPEC
Crude’s decline since the Organisation of Petroleum Exporting Countries and its allies announced deeper output cuts on Thursday showed the scale of the task the grouping had on its hands if it wanted to balance the market in the first quarter of next year.
Futures had dropped by almost a quarter from a peak in late September on concern increased production from outside the group would outstrip demand growth.
“Crude has been oversold,” said Vandana Hari, founder of Vanda Insights in Singapore.
“It’s hard to imagine it’s still reeling from the shock of the OPEC+ decision,” she said and added that thin liquidity was likely exacerbating price moves.
Russia
Russia’s Deputy Prime Minister Alexander Novak said on Tuesday OPEC+ could take further measures if last week’s agreement wasn’t enough to balance the market.
Novak spoke a day before he was set to join President Vladimir Putin on a visit to the United Arab Emirates and Saudi Arabia.
In another sign of abundant supply, the American Petroleum Institute said inventories both across the US and at the Cushing, Oklahoma, storage hub rose last week, according to people familiar with the figures. Official data is due later Wednesday.