Oil prices have reportedly experienced a continuous decline since last Tuesday due to increased oil supply by the United States (US) and concerns over China's slowing energy demand.
Brent crude was down 48 cents at $80.70 a barrel and West Texas Intermediate crude was also down 53 cents at $76.13 a barrel. Both fell over 1.5% in the previous session.
The WTI crude oil contract which is considered to be contango will trade below the contract price for two months. This indicates that investors expect a price increase with a discount of 17 cents for the second month.
According to CMC Markets market analyst, Tina Teng, oil prices are under additional pressure due to concerns over record US crude oil production and troubling demand growth.
Crude oil stocks rose by 3.6 million barrels to 421.9 million barrels last week. According to information from the Energy Information Administration (EIA), it far exceeded analysts' expectations in a Reuters poll for an increase of 1.8 million barrels.
Currently, the US still produces 13.2 million barrels of crude oil per day.
In October, China's oil-producing factories slowed slightly compared to the previous month due to lower fuel industry demand and shrinking refining margins.
However, China's economy showed improvement last month with rapid industrial growth and better-than-expected retail sales results.
Jun Rong Yeap, IG Marketing Strategy Officer reminded to take into account that the supply-demand dynamic has decreased and caused the release of the previous 'bullish' position.
