Oil fell for a fourth day, extending losses from a five-year low amid speculation that US crude inventories will stay at the highest level since June, offering no relief from a global glut.

Futures dropped as much as 1.2 percent in New York. Stockpiles in the US, the world’s largest oil consumer, are projected to remain at 387.2 million barrels last week, a Bloomberg News survey shows before government data tomorrow.

Hedge funds pared bullish bets on Brent crude for the first time since before the Organisation of Petroleum Exporting Countries’ (Opec) decision last month to maintain output quotas accelerated the market’s collapse.

Oil has slumped 46 percent this year, set for the biggest annual decline since 2008, as the highest US production in more than three decades contributed to a global surplus estimated by Qatar at 2 million barrels a day.

Saudi Arabia, which is steering the Opec to resist cutting output, has said it’s confident that prices will rebound as economic growth boosts demand.

“The market’s oversupply isn’t an issue that could be solved in the short term,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc in Seoul, said by phone today. “Oil prices are suffering as Opec members, led by Saudi Arabia, firmly hold on to their stance to maintain output.”

West Texas Intermediate (WTI) for February delivery slid as much as 66 cents to US$52.95 (RM185.11) a barrel in electronic trading on the New York Mercantile Exchange and was at US$53.05 at 3.55pm Singapore time.

The contract decreased US$1.12 to US$53.61 yesterday, the lowest close since May 2009. The volume of all futures traded was about 17 percent below the 100-day average.

Crude stockpiles

Brent for February settlement fell as much as 82 cents, or 1.4 percent, to US$57.06 a barrel on the London-based ICE Futures Europe exchange. It dropped US$1.57 to US$57.88 yesterday. The European benchmark crude traded at a premium of US$4.12 to WTI.

US crude inventories have risen to almost 13 percent above the five-year average level of 343.1 million barrels for this time of year, according to the Energy Information Administration (EIA).

Supplies were probably unchanged in the seven days ended Dec 26, based on the median estimate in the Bloomberg survey of seven analysts before the EIA report. Stockpiles climbed 7.3 million the prior week.

Production expanded to 9.14 million through Dec 12, the most in weekly data that started in January 1983, said the Energy Department’s statistical arm.

The nation’s oil boom has been driven by a combination of horizontal drilling and hydraulic fracturing, or fracking, which has unlocked supplies from shale formations.

Opec supply

US production from fracking is flooding the market, Venezuela President Nicolas Maduro said in a speech broadcast on state television yesterday. The South American country had urged an output cut at Opec’s Nov 27 meeting in Vienna.

The 12-member group, which supplies about 40 percent of the world’s oil, pumped 30.56 million barrels a day in November, a separate Bloomberg survey of companies, producers and analysts shows. That exceeded its collective target of 30 million for a sixth straight month.

Money managers reduced their net-long positions on Brent by 15 percent to 112,886 contracts in the week to Dec 23, according to ICE Futures Europe.

Producers, consumers and end users also became more bearish in the period covered by the exchange’s Commitments of Traders report, increasing bets on falling prices by 5.8 percent to 337,270 contracts.

- Bloomberg