Oil prices fell more than 2 percent after hitting their lowest level in 10 months in volatile trading as concern about the continued abundance of global supplies due to growing US crude production and the decline in refining activity in China.
The US benchmark WTI futures contract was down 98 cents, or 2.3 percent, to settle at $ 42.53 a barrel after touching its lowest level since August 2016 at $ 42.13, while global benchmark crude futures fell $ 1.20 or 2.61 percent to reach $ 42.13. At $ 44.82 per barrel.
“US crude inventories fell 2.7 million barrels last week, exceeding expectations of a 2.1 million barrel decline,” the Energy Information Administration said.
The data gave short-term price support, but the market quickly abandoned its gains and headed down.
The Energy Information Administration report also showed that oil production in the United States raised to 9.35 million barrels per day, approaching the levels of Saudi Arabia and Russia, the largest producers in the world.
Oil fell 20 percent in the first half of 2017, a period in which prices tend to rise. This is the biggest loss for Brent contracts for the first half of the year since 1997. Over the period, Brent contracts rose in the first half of all years except six years.