Oil prices slid to three-month lows on Tuesday after OPEC reported a rise in global crude stocks and a surprise jump in self-reported production from its biggest member, Saudi Arabia, that came despite output curbs by the group.
Even though OPEC made an upward revision to its global demand outlook, signs of even modestly higher Saudi output flustered investors. The selloff sent prices to their lowest levels since Nov. 30 when the kingdom, the world’s biggest oil exporter, led the Organization of the Petroleum Exporting Countries (OPEC) to cut supplies.
Brent futures, which fell below their 200-day moving average for the first time since late November, were down 45 cents, or 0.9 percent, at $50.90 a barrel by 2:34 p.m. EDT (1834 GMT).
U.S. crude ended Tuesday’s session down 68 cents, or 1.4 percent, to $47.72 a barrel, marking its seventh straight daily decline, its longest such streak since January 2016.
On technical charts, Brent and WTI both remained in oversold territory for a fifth day in a row, their longest such streaks since November.
The Brent front-month premium over the corresponding U.S. contract rose to its highest since late January.
Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.
In an effort to dispel market concerns, the Saudi energy ministry said the “difference between what the market observes as production, and the actual supply levels in any given month, is due to operational factors that are influenced by storage adjustments and other month to month variables.”
Oil prices have given back almost all gains notched since OPEC’s Nov. 30 announcement of cuts aimed to stabilize prices and draw down global stockpiles.
“Oil prices have come under renewed pressure after the latest OPEC report showed a rise in global crude inventory despite the cartel deciding to curtail its output,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
The Organization of the Petroleum Exporting Countries said in its monthly report that oil stocks in industrialized nations rose in January to stand 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.
This week’s data is expected to show another rise in U.S. inventories after last week’s bigger-than-expected increase.
It would be the 10th consecutive weekly increase in U.S. crude stocks, boosting total inventories, including strategic reserves, further past the 1.22 billion barrel record high hit during the week ended March 3.
The American Petroleum Institute reports its stockpile data on Tuesday afternoon at 4:30 p.m EDT ahead of official U.S. government data Wednesday morning.
“A sniff of another big crude build and down we go towards $45,” said Matt Stanley, commodities broker at Freight Investor Services.
With stockpiles growing, investors are seeking indications that OPEC will extend reductions beyond June. Saudi Arabia has yet to indicate clearly whether it is ready to extend supply curbs.
Saudi ally Kuwait said on Monday it would support an extension of the global deal. Oil Minister Essam al-Marzouq said an extension would “help bring prices to acceptable levels for oil-producing nations and the industry in general.”