Dubai: Crude oil erased early gains on Wednesday, extending Tuesday’s 8 per cent fall, the third biggest daily fall since the global financial crisis, amid reports of a supply glut and bearish outlook from BP in the first half.
Brent crude for April delivery was down nearly 1 per cent at $30.47 (Dh111) per barrel. The contract lost 7.8 per cent to $30.32 on Tuesday, the biggest decline since September 1. WTI for March delivery was also down nearly 1.5 per cent to be at $27.90.
“Oil is under fresh selling pressure ahead of the US crude inventory data, as traders are expecting that those US supplies will be still swimming in supply glut,” Naeem Aslam, chief market analyst with AVA Trade told Gulf News.
“The recent gains are fading as the odds are going higher that perhaps we are heading toward another recession and the recent loss of confidence in the global banking sector has made matters worse. This is adversely impacting the price of oil,” Aslam added.
Meanwhile, according to Chief Executive Officer Robert Dudley, BP is “very bearish” for the first half and expects surplus production to only start diminishing when storage tanks fill up,
Oil is down about 25 per cent this year on speculation a global glut will persist amid the outlook for increased exports from Iran.
