NEW YORK Oil prices fell 7 percent on Tuesday as equity markets remained weak, forecasts called for record high U.S. crude stockpiles to grow more, and the latest global energy demand outlooks did not look strong enough to eliminate the swelling glut.
U.S. gasoline futures fell to a 2008 low ahead of weekly inventory data expected to show crude and gasoline stocks growing to record highs.
Continuing weakness in equity markets also pressured oil. Wall Street's S&P 500 index .SPX fell almost 1 percent. [.N]
Sunday's talks between Saudi Oil Minister Ali al-Naimi and his Venezuelan counterpart produced no tangible signs of progress on coordinated oil production cuts between OPEC and non-OPEC suppliers.
Oil prices were pressured further by weak demand outlooks issued by the U.S. government's Energy Information Administration (EIA) and the Paris-based International Energy Information (IEA).
"The longs have withdrawn from the market and the sellers are back in full force," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Brent crude LCOc1 was down $2.34, or 7.1 percent, at $30.54 a barrel by 1:15 p.m. ET (1815 GMT).
U.S. crude CLc1 fell $1.45, or 5 percent, to $28.23.
U.S. gasoline futures RBc1 fell 5 percent and heating oil HOc1 was down nearly 7 percent.
U.S. crude stockpiles likely rose 3.6 million barrels in the week ended Feb. 5, said the latest Reuters survey ahead of data due at 4:30 p.m. (2130 GMT) from industry group American Petroleum Institute (API). The API data runs before official stockpile numbers on Wednesday from the EIA. [EIA/S]
The EIA in a separate report on Tuesday said it has lowered its oil demand growth forecast for 2016 by 110,000 barrels per day and 2017 by 260,000 bpd.
That report came after another the Paris-based IEA said it did not expect global demand for oil to grow quickly enough to erase the overhang of crude any time soon.
The IEA, the West's energy watchdog, cut its forecast for 2016 oil demand growth, which now stands at 1.17 million barrels per day (bpd) following a five-year high of 1.6 million in 2015, and reduced its estimate of demand for OPEC crude.
"The IEA report was a bearish blow, followed by the EIA report which sings from the same hymn sheet," said Matt Smith, director of commodity research at energy data provider ClipperData.
The world's largest oil trader, Vitol [VITOLV.UL], said it expects global oil demand to grow by around 1 million bpd this year, down from last year's rate 1.6 million bpd.
(Additional reporting by Amanda Cooper in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and David Gregorio)
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First Published On : Feb 10, 2016 00:45 IST