Oil prices resumed their decline Wednesday after a US report showing that stockpiles surged last week, with analysts warning of further weakness.
Ahead of an official US government report, the industry-funded American Petroleum Institute said stockpiles increased by 2.3 million barrels last week.
US benchmark West Texas Intermediate for delivery in September fell 58 cents to $50.28 a barrel.
Brent North crude for September slid 35 cents to stand at $56.69 a barrel in London midday deals.
Both contracts had posted gains Tuesday.
“Crude prices remain under pressure as the supply overhang continues to persist,” said Bernard Aw, market strategist at IG Markets.
Wednesday’s official Energy Information Administration data “will be closely monitored, although it is evident that the supply glut problem is expected to stay for a while longer,” Aw added.
Oil prices have tumbled from more than $100 a barrel in June last year as strong production from the United States and the Organization of the Petroleum Exporting Countries led to supply outpacing demand.
Concerns over the return of Iranian oil to the market following a deal with major powers on its nuclear ambitions have also depressed prices.
The deal — which aims to prevent Iran from building a nuclear weapon — allows for the lifting of crippling economic sanctions on the country, enabling it to ramp up shipments of oil.
A strong greenback, boosted by the prospect of higher US interest rates, has also dented demand for dollar-priced oil and helped push prices downwards.
Written by Barbara Laborde of AFP