New York — Oil prices sank Tuesday, with the US benchmark hitting a five-month low on expectations that the Energy Department will report another weekly rise in stockpiles.
New York’s main contract, West Texas Intermediate (WTI) for delivery in December, dropped $2.10 to $93.04 a barrel.
In London trade, Brent North Sea crude for December lost 59 cents to $105.81 a barrel.
New York prices were under pressure ahead of the official US crude stockpiles report for the week to November 8, to be released early Wednesday.
Official data released last week showed US commercial crude inventories rose for the seventh straight week, hitting 29.8 million barrels, indicating soft demand in the world’s biggest economy.
Robert Yawger of Mizuho Securities USA also pointed to the new report from OPEC showing no slack in supplies and a rise in global inventories to a 58.3-day buffer since 2009, compared with the average 52.1 days’ worth of supply carried ahead of the 2008 financial crisis.
Traders continued to watch for signs of a breakthrough in the West’s attempts to forge a nuclear deal with Iran that could lead to a lifting of sanctions on Tehran and release more of its oil into the global marketplace.
But until there is some firm sign of progress, prices in London will stay relatively firm, analysts said.
“After the nuclear talks with Iran were adjourned without any result having been achieved at the weekend, it is clear that hopes harbored by market participants that Iran?s oil supply would soon return to the market were premature,” said Commerzbank analyst Carsten Fritsch.
“What is more, the situation in Libya is continuing to give little reason for optimism that the country?s oil production might normalize in the foreseeable future,” he added.
In Vienna, the Organization of Petroleum Exporting Countries raised its estimate for global demand for oil this year, counting on economic recovery in advanced countries.
In its monthly report, it raised its estimate for demand this year by 400,000 barrels per day to 89.78 million barrels a day — and held it at 90.78 million bd forecast for 2014.
