LONDON (Mar 18): Brent oil prices fell towards $53 a barrel on Wednesday on oversupply concerns as U.S. crude stocks hit a new record high, according to government data.
U.S. crude inventories rose by 9.6 million barrels to a new record of 458.5 million barrels in the week to March 13, the U.S. government's Energy Information Administration (EIA) figures showed on Wednesday.
Brent for May delivery was down 36 cents at $53.26 per barrel by 1440 GMT after ending the previous session up 7 cents.
U.S. crude for April delivery fell 93 cents to $42.53 per barrel, after hitting a six-year low of $42.05 earlier in the session.
"The crude oil inventory rise is too big a factor to ignore at this point, and speculation over storage capacity limits will only increase," said John Kilduff, partner at Again Capital LLC in New York.
Crude stocks at the Cushing, Oklahoma delivery hub rose by 2.87 million barrels to 54.4 million barrels, the highest level on record, the EIA said.
The expiry of the Brent contract on Monday and the West Texas Intermediate forward contract on March 20 "is adding a bit of fuel, adding to volatility in the market," said Ben LeBrun, a market analyst at Sydney's OptionsXpress.
Traders on Wednesday are also watching for the U.S. Federal Reserve to outline monetary policy objectives including regarding interest rates.
"If U.S. interest rate hikes would be pushed back, this would likely cause the dollar to weaken, however, only in the short run," Singapore's Phillip Futures said in a research note.
Global oversupply concerns have been spurred by factors including U.S. output levels, some recovery in Libya's production and the potential for a boost in Iran's exports should Western sanctions be lifted.
There could also be more downward pressure on prices as China pauses its build-up of strategic reserves and Asian refineries slow imports ahead of spring maintenance.
Crude oil exports from Saudi Arabia rose in January to 7.47 million barrels per day, their highest level since April last year, according to data published on Wednesday by the Joint Organisations Data Initiative (JODI).