United States crude oil prices fall as inventories hit record high


Despite the report of talks, competition between OPEC members still appears to be fierce, with producers fighting for market share by lowering prices as Iran offered its crude to Asia at a discount to rival OPEC producer Saudi Arabia.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $27.35 per barrel at 0014 GMT, up $1.14 or 4.35 percent from their previous settlement.

Late last month, prices had rallied on speculation that Russian Federation - the largest global oil producer - and the 12-nation OPEC cartel could discuss coordinated output cutbacks.

Oil is down 26 percent this year on speculation a global glut will persist amid the outlook for increased exports from Iran after the removal of worldwide sanctions and brimming USA crude supplies.

Oil prices have fallen nearly 75 percent since mid-2014 as producers pump 1-2 million barrels of crude every day in excess of demand, just as China's economy grows at its lowest rate in a generation.

A rebound in crude oil prices will not be as straightforward as many had expected.

Gasoline inventories increased by 1.3 million barrels, compared to expectations for a gain of 0.5 million barrels, while distillate stockpiles rose by 1.3 million barrels.

The group's output level last month implies a global oil surplus of 1.84 million barrels a day in the first quarter of 2016, based on the report's data.

"Investments in the oil sector have become a considerable factor for GDP growth in the past years and, consequently, recent shortfalls have caused an important negative impact", they said.

The commodity hasn't settled below $26 since May 2003, according to the Oil Price Information Service.

"Given the falls that we have seen over the last three trading sessions, it is a little surprise to see such aggressive selling interest during our time zone", said Michael McCarthy, chief market analyst at CMC Markets in Australia.