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RPT-UPDATE 8-Oil falls as supply glut, demand concerns apply pressure

Published 10/09/2015, 07:00 am
Updated 10/09/2015, 07:07 am
© Reuters.  RPT-UPDATE 8-Oil falls as supply glut, demand concerns apply pressure
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(Repeats to widen distribution, no change to headline or text)

* Physical oil overhang remains in place, weighs on futures

* U.S. equities turn lower, give up early gains

* British crude oil production to rise (Adds analyst comment, API data, paragraphs 3, 7-9)

By Robert Gibbons

NEW YORK, Sept 9 (Reuters) - Oil prices fell nearly 4 percent on Wednesday, pressured by ample supply and concerns about demand being curbed by slowing economic growth.

Oil futures extended losses as U.S. equities turned lower after the prospect of economic stimulus from China boosted stock markets in Japan and Europe. .N MKTS/GLOB ID:nL4N11F01S

"The (oil futures) complex displayed a heavy feel throughout the session as it was unable to advance with the equities early in the day but came off hard late session when the U.S. stock market swung into the negative column," Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois, said in a note.

Crude oil futures have been under pressure from concerns about swollen inventories, high global production and the increasing likelihood that Iranian barrels will return to export markets even as slowing growth in China threatens demand.

Brent crude LCOc1 fell $1.94, or 3.92 percent, to settle at $47.58 after climbing 4 percent in the previous session.

U.S. crude CLc1 dropped $1.79, or 3.9 percent, to settle at $44.15, having eased on Tuesday as trading resumed after the Monday's Labor Day holiday.

Brent and U.S. crude fell to session lows in post-settlement trading after American Petroleum Institute data showed U.S. crude stocks rose 2.1 million barrels last week as refineries cut output. API/S

Gasoline and distillate inventories also increased.

Analysts surveyed by Reuters had expected crude stocks to be up 900,000 barrels. EIA/S

The U.S. Energy Information Administration cut its forecast for 2015 and 2016 world oil demand growth in its monthly report. ID:nEMN1ILGY0

Traders awaited a fresh snapshot of U.S. oil inventories from industry and government, starting with American Petroleum Institute data due at 4:30 p.m. EDT.

While Saudi Arabia's crude oil production dipped by 100,000 barrels per day in August, the Organization of the Petroleum Exporting Countries continued to produce close to record volumes. ID:nL5N11F22U

Russia and Mexico have indicated they will not cut production, cooling speculation that some producers might organize to lower output to support prices. ID:nL1N11E1DU ID:nL4N11D0R1

Britain's oil and gas industry association said the country's output was set to post a gain in 2015, the first in 15 years, reflecting investment in more efficient technology. ID:nL5N11E2RT

Oil prices are off more than 50 percent since June 2014 because of the global supply glut. In recent weeks, oil rallied in volatile trading after falling to 6-1/2-year lows when a stock market slide in China sent global equities and commodities prices tumbling.

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