Global benchmark Brent crude was back to trading below $50 per barrel, despite earlier gains, in a marked departure from the three-day bull market seen over the last few days of August.
US benchmark West Texas Intermediate (WTI) also fell, to trade around $43.55.
The latest numbers from the Energy Information Administration, out yesterday afternoon, show that US crude inventories rose by 4.67m barrels to 455.4m barrels in the week to 28 August. Meanwhile, gasoline inventories fell slightly, by 271,000 barrels.
“The report is mixed in that it is bearish for crude oil, but somewhat supportive of refined products,” said John Kilduff at Again Capital. “Crude oil imports rebounded markedly and refinery utilisation fell again, allowing for the substantial crude oil inventory rise.”
Yesterday’s report followed numbers from the American Petroleum Institute on Tuesday, which showed an increase in crude stockpiles of 7.6m barrels.
Analysts at IG said the latest US data – coming alongside Saudi Arabia oil production well above its quota under the Organisation of Petroleum Exporting Countries – made it “clear that the supply glut dominating the oil market is not over”.
“With US driving season out the way, demand will certainly wane into the winter months, and with Iran bringing increasingly more crude to market, there is a good chance that oil prices could fall once more,” the spread betting group added.
Meanwhile, analysts at Barclays yesterday warned that oil is “set for a rapid slowdown in import growth” in China. Several commentators have pointed to concerns over the Chinese economy as a factor driving oil prices down.
However, Malcolm Graham-Wood, analyst at HydroCarbon Capital, said that, following a rise of nearly 30 per cent over the past week, “it was inevitable that the oil price would come off”.
He added: “Still, we are over five bucks up on this time last week so mustn’t really complain.”