Oil prices fell on Tuesday, on course for a third week of losses as U.S. inventory data is expected to show another increase in crude stocks.
Brent LCOc1 for December delivery had fallen 38 cents to $47.16 a barrel by 10.25 p.m. ET, after settling the previous session down 45 cents, or almost 1 percent.
U.S. crude CLc1 for December delivery dropped 51 cents to $43.47 a barrel, having ended the day before down 62 cents, or 1.4 percent.
The fall in U.S. crude pushed it below technical support levels, said Ric Spooner, chief market analyst at Sydney’s CMC Markets.
“While you can never be certain, (charts) suggests this is not going to be a false break. The latest breakdown follows failure at the 200-day moving average a couple of weeks ago,” he said in a blog post.
U.S. commercial crude oil stockpiles likely rose for a fifth straight week, by an average of 3 million barrels to 479.6 million, in the week ended Oct. 23, a preliminary Reuters survey taken ahead of industry and official inventory data, showed on Monday.
While stocks of distillates, which include diesel and jet fuel, were seen falling 2 million barrels, storage utilization for distillates in the U.S. and Europe is nearing historic highs, according to a report on Monday by Goldman Sachs. [EIA/S]
“Oil is still in a bit of a funk,” said Ben Le Brun, market analyst at Sydney’s OptionsXpress.
“Inventories … (and) U.S. production numbers continue to disappoint the market,” he said.
“Producers are squeezing as much production as they can.”
Investors are also waiting for the outcomes of key policy meetings this week to give some direction to the market, Le Brun said.
That includes the outcome of a two-day U.S. Federal Reserve Open Market Committee policy meeting which starts later on Tuesday and China’s fifth plenum, a four-day meeting of the Communist Party’s central committee, that began on Monday.
China’s policy meeting is expected to set a 7-percent annual growth target in its 13th Five-Year plan, a blueprint for economic and social development between 2016 and 2020.