Oil prices fell as much as 3% today after data indicating new record highs in US crude inventories added to worries about oversupply in a slowing global economy.
Stockpiles at the Cushing, Oklahoma hub for US crude deliveries rose by more than 503,000 barrels to reach above 67.5 million barrels between 19 and 24 February, market intelligence provider Genscape reported, traders who saw the data said.
US government data yesterday showed that Cushing inventories rose 333,000 barrels last week to reach 65.1 million for a fourth straight week of record highs.
Inventories for all of the United States are at all-time peaks above 507 million barrels.
"Throwing in a further Cushing build to the overall record in stocks makes it very difficult for this market to rally," said Pete Donovan, broker at New York's Liquidity Energy.
US crude futures were down 85 cents at $31.30 a barrel by 4.28pm Irish time, after falling more than $1 earlier.
Brent crude futures traded 65 cents lower to $33.76 a barrel, also having lost more than $1 at the session low.
Oil prices are down about 70% from highs above $100 a barrel in a 20-month long sell-off that has met little resistance.
But after hitting 2003 lows between late January and early this month, oil prices had shown better recovery, leading some traders to bet the market had hit bottom, until the renewed declines this week after data showing the new highs in US crude inventories.
"We keep taking out intraday support levels," said David Thompson at Powerhouse, another energy-focused commodities broker in Washington.
"This last rally that topped out on 23 February has less technical strength than the previous rally which topped out on 2 January, so I suspect more bearishness in the short-term."
Economists at Citi cut their forecast for this year's global economic growth to 2.5% from a previous 2.7%, citing slowing growth concerns.
"Global growth prospects are worsening further, with deterioration across advanced economies alongside previous weakness in emerging markets," the note said.
