Brent crude traded near its lowest level in four years amid speculation that a drop in OPEC output last month won’t eliminate a supply glut.
Futures declined for a third day. The Organization of Petroleum Exporting Countries said its production dropped by 226,400 barrels a day to 30.253 million in October, the largest decrease since March. West Texas Intermediate crude slid on forecasts that U.S. inventories rose for a sixth week.
“That factors that brought us down here are still the main focus,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “Even though OPEC said it cut production, we continue to have fears that we have a global supply glut. We can see another build in U.S. stockpiles this week.”
Brent for December settlement declined 58 cents, or 0.7 percent, to $81.09 a barrel at 9:07 a.m. New York time on the London-based ICE Futures Europe exchange. The contract, which expires tomorrow, closed at $81.67 yesterday, the lowest since October 2010. The more-active January contract was down 0.6 percent at $82.39 a barrel. The volume of all futures was 14 percent below the 100-day average.
WTI for December delivery dropped 72 cents, or 0.9 percent, to $77.22 a barrel on the New York Mercantile Exchange. Volume was 9.1 percent below the 100-day average. The U.S. benchmark crude was at a $3.86 discount to Brent on the ICE.