Crude oil prices fell for the first time in four sessions on Tuesday after the International Energy Agency (IEA) warned that ample supplies will raise global inventories before investment cuts begin to significantly dent production. Oil stockpiles in member countries of the Paris-based Organization for Economic Cooperation and Development (OECD) may approach a record 2.83 billion barrels by mid-2015, said the IEA, advisor on energy policy to a group of Western nations.
U.S. March crude futures CLc1 fell $2.84, or 5.37 percent, to settle at $50.02 a barrel, after dropping to $49.86. Brent March crude LCOc1 fell $1.91, or 3.3 percent, to settle at $56.43 a barrel, having fallen as low as $56.11.
“It’s the battle of the oil outlooks playing out here,” said John Kilduff, partner at New York energy hedge fund Again Capital LLC. “The IEA report is a good reminder that there’s still a lot of supply to come and it doesn’t give much hope for the bulls who say we’ve hit bottom and are now on the way up.” While the supply-demand balance in oil was expected to tighten by end-2015, the IEA cautioned that “downward market pressures may not have run their course just yet.”