Oil held onto its biggest two-day drop in a month, as concerns about a global supply glut continued to weigh on market sentiment.
Brent crude traded near $62 a barrel after losing 3% in the previous two sessions, while West Texas Intermediate crude remained above $58.
The United States said its crude oil production will reach a record 13.6 million barrels per day this year, adding to the flow of supplies that is flooding the global market.
“Whether it’s a surplus or a very large surplus, it’s hard to escape,” said Saad Rahim, chief economist at Trafigura Group, on Tuesday in a video posted alongside the company’s annual results.
Reports of a decline in US inventories
The American Petroleum Institute, an industry-funded organization, reported that U.S. crude inventories fell by 4.8 million barrels last week, according to a document seen by Bloomberg.
But fuel inventories saw significant increases, both for gasoline and distillates such as diesel. Official data will be released on Wednesday.
Since the beginning of November, crude oil has remained stuck in a narrow range of $4 a barrel, as concerns about oversupply compete with geopolitical risks related to the flow of Russian barrels to countries including India.
Key reports from the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) are expected later this week, which may provide a clearer view of future prospects.
