Oil prices fell early on Thursday, extending losses in previous sessions, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown.
The Brent crude January LCOc1 futures contract lost 44 cents, or 0.32 per cent, to trade at $74.72 per barrel by GMT 0054 GMT. West Texas Intermediate (WTI) crude CLc1 futures fell 46 cents to $65.01 a barrel.
Both benchmarks posted their worst monthly performance since July 2016 on Wednesday, with Brent falling 8.8 per cent for the month and WTI dropping 10.9 per cent.
Thursday’s drops came after US Energy Information Administration data showed crude oil inventories climbed for a sixth straight week.
“The strong built in oil inventories is likely to keep downward pressure on oil prices,” ANZ Research analysts said in a note.
Meanwhile a Reuters survey found the Organization of the Petroleum Exporting Countries (OPEC) boosted oil production in October to its highest since 2016, as higher output led by the United Arab Emirates and Libya more than offset a cut in Iranian shipments due to US sanctions, set to start on November 4.
US President Donald Trump said on Wednesday in a presidential memorandum that he had determined there was sufficient supply of petroleum and petroleum products from nations other than Iran to permit a reduction in purchases from that country.
Also weighing on prices is growing concerns over the prospect of a global slowdown amid the ongoing US-China trade war, said Bruce Xue, an analyst with Huatai Great Wall Capital Management.
“Oil investors are now betting on the potential of global slowdown,” Xue said.
China delivered disappointing PMI data, with its manufacturing sector in October expanding at its weakest pace in over two years.
