Oil fell on Wednesday, hit by record Saudi Arabian output, improved prospects for U.S. output and a glut in refined fuel.
Analysts mostly expected no impact on actual supplies from talk of a potential producer meeting to discuss propping up prices.
International benchmark Brent crude futures LCOc1 were down 13 cents at $44.85 per barrel at 1216 GMT (0816 ET).
U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $42.50 per barrel, down 27 cents from their last settlement.
Top exporter Saudi Arabia boosted its oil output to a record high in July of 10.67 million barrels-per-day (bpd), it told the Organization of the Petroleum Exporting Countries.
OPEC said in its monthly oil report citing secondary sources its crude output, including Gabon, rose to 46,000 bpd in July to 33.11 million bpd compared with June.
This comes as OPEC member Venezuela tries to drum up support for a producer meeting to decide measures that would buoy oil prices.
“Oil eased lower as another round of proposed production freeze talks by OPEC failed to excite investors,” ANZ Bank said.
When producers last held such talks in April, OPEC members failed to agree on any measures.
“Renewed attempts at verbal intervention by OPEC will help bolster oil market sentiment, although the group will struggle to rebuild its role as a backstop to Brent,” oil analysts at BMI Research said in a note to clients.
Traders said excess supplies of crude and refined fuel products weighed on markets, and a proposed meeting by oil producers was unlikely to result in significant market tightening.
The U.S. Energy Information Administration added to the market’s unease when on Tuesday it forecast a smaller decline in U.S. crude oil production in 2016 than it projected a month ago as drilling activity picks up. [EIA/S]
The agency now expects U.S. oil output to fall by 700,000 barrels per day (bpd) this year to 8.73 million bpd, compared with the 820,000-bpd drop it previously forecast.
A global products glut that has led storage tanks from Houston to Singapore to reach near capacity is also weighing on oil prices, as analysts warn that only large-scale refinery run cuts can clear the excess.
In Singapore, oil refining profits dropped to two-year lows on Wednesday, in the latest sign that the industry is pumping too much fuel for the market to absorb.