Global oil prices slumped to an eight-month low Tuesday as investors continued to trim bets on crude gains in the face of a relentless rise in U.S. production and ongoing questions over global demand.
West Texas Intermediate crude futures for August delivery, which will take over as the new "front month" contract at the end of the trading day, were marked at $43.19 per barrel at 10:15 eastern time, the lowest since November 14. WTI prices have fallen more than 16% since OPEC agreed to extend production cuts that, along with support from non-member states such as Russia, will remove 1.8 million barrels from the market each day until March 2018.
Brent contracts for August delivery, which typically represent a broader benchmark for global pricing, were marked 2.8% lower from Monday's close and changing hands at $45.60 each.
The price moves come as investors await data from the American Petroleum Institute later in the session which will estimate the size of commercial crude, gasoline and distillate stocks for the week ending on June 16.
Crude prices fell sharply after the Paris-based International Energy Agency that said on June 14 that new production from OPEC rivals will be more than enough to meet growth in demand in 2018, despite the so-called oil cartels best efforts to cut its own production to return the commodity's supply and demand to balance.
The IEA also estimates that U.S. production will rise to 10 million barrels a day next year and that global crude stocks are around 292 million barrels over their five-year average.
That same day, Energy Information Administration said U.S. crude inventories fell by 1.7 million barrels in the week ending June 9, against a market expectation of a 2.7 million drawdown and compared to the 2.7 million barrel increase reported by the API over the same period. The EIA also said that crude stocks at the Cushing, Okla., distribution hub fell by 1.2 million barrels last week.
Gasoline stocks, however, rose by a surprise 2.1 million barrels, against an expectation of a 457,000 gallon drawdown as Americans spend more time travelling to vacation destinations around North America in the peak of the summer driving season.