Oil resumes decline on signs US crude supplies worsening glut

Hong Kong - Oil fell after the longest run of gains in a month as US industry data showed crude stockpiles rose, exacerbating a glut.

Futures lost as much as 1.3% in New York after climbing 4% the previous four sessions. US stockpiles expanded by 851 000 barrels last week, the American Petroleum Institute was said to report on Tuesday.

Government data on Wednesday is forecast to show inventories extended declines from a record reached at the end of March.

Oil in New York and London tumbled into a bear market last week on concerns that rising global supply will counter output cuts from the Organisation of Petroleum Exporting Countries and its partners.

US crude inventories remain stubbornly high, more than 100 million barrels above the five-year seasonal average, according to data from the Energy Information Administration.

"Rallies in this market are going to be very fragile and any bad news is going to see prices sold off," said David Lennox, a resource analyst at Fat Prophets in Sydney.

"Investors are well aware of the abundant supply situation and we really need to see some uplift in demand to help clear that."

West Texas Intermediate for August delivery lost as much as 57 cents to $43.67 a barrel on the New York Mercantile Exchange, and was at $44.03 at 1pm in Hong Kong. Total volume traded was about 29% above the 100-day average.

The contract gained 86 cents to close at $44.24 on Tuesday.

Brent for August settlement was down 11 cents at $46.54 a barrel on the London-based ICE Futures Europe exchange after falling as much as 0.9% earlier.

Prices added 82 cents to $46.65 on Tuesday. The global benchmark crude traded at a premium of $2.49 to WTI.

US gasoline stockpiles increased by 1.35 million barrels last week, the API said, according to people familiar with the data. American crude inventories probably slid by 2.25 million barrels, according to the median estimate in a Bloomberg survey before the EIA report.

Oil-market news:

Canada’s active rigs climbed to 169 last week, the highest level since March, according to data posted on the Canadian Association of Oilwell Drilling Contractors website.

Short positions held by speculators in Brent crude advanced to 169 million barrels last week, the highest since records started in 2011, according to exchange data.

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