U.S. oil prices fell more than 2% on Aug. 24 on an unexpected increase in U.S. crude stocks that revived worries about the supply glut that has capped prices for the past two years.
Industry data from the American Petroleum Institute showed on Aug. 23 that U.S. crude inventories had risen by 4.5 million barrels (MMbbl) in the week ending Aug. 19. Analysts had expected a 455,000-bbl fall.
This pushed U.S. West Texas Intermediate (WTI) crude down more than $1, erasing gains made in the previous session.
WTI was down $1.03, or 2.1%, at $47.07 a bbl at 6:37 a.m. CT (11:37 GMT).
Global benchmark Brent crude was down 69 cents, or 1.4%, at $49.27 a bbl, after touching an intraday low of $49.07.
"API [data] showed a big build last week and that supported the quick turnaround in sentiment," said Ole Hansen, Saxo Bank's head of commodities research.
The U.S. government will publish its own weekly crude stocks data at 9:30 a.m. CT (14:30 GMT) on Aug. 24.
Brent briefly spiked above $50 in the previous session after Reuters reported Iran was sending positive signals that the country may support joint OPEC action to prop up oil prices.
RELATED: Iran Sends Positive Signals For Action To Boost Oil Price, Sources Say
But analysts and traders remain skeptical that producers will come to an agreement at a meeting in Algeria scheduled for Sept. 26-28 as various OPEC members have their own agendas.
"There is currently a race to print any freeze headlines but we have not yet seen strong substance behind them," said Olivier Jakob, managing director of PetroMatrix in Switzerland.
Iraq's prime minister said on Aug. 23 his country had not yet reached its full oil market share, suggesting the government would not restrain crude output as part of any OPEC agreement.
China's state-controlled oil firm CNOOC said on Aug. 24 an oil price recovery was facing "significant headwinds," as it reported swinging to a loss in the first half of the year due to weak prices
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