Oil prices sank to three-month lows today after the US government said crude inventories had increased much more than expected, stoking concerns about demand in the world's largest economy.
New York's main contract, West Texas Intermediate for delivery in November, fell USD 1.59 from Friday's close to settle at USD 99.22 a barrel -- its lowest level since July 1.
The European benchmark futures contract, Brent North Sea crude for December, finished at USD 109.64 a barrel in London trade, down 30 cents.
The US Department of Energy said US crude inventories increased by 4.0 million barrels in the week ending October 11. Analysts had on average forecast a rise of 1.7 million barrels, according to Dow Jones Newswires.
The closely watched weekly report, which typically is released Wednesdays, had been postponed amid the October 1-16 partial government shutdown over a budget impasse in Congress.
On Wednesday the DoE will report the data for the week ending October 18.
Matt Smith, a commodity analyst for Schneider Electric, highlighted the prospects of ample supplies weighing on prices.
"WTI has dropped into double-digitdom for the first time since July. Meanwhile, Libya has five out of its nine oil ports and terminals back up and running, with 600,000 barrels a day of production," Smith said.
In another reassuring sign for future oil supplies, China's CNOOC and CNPC, Anglo-Dutch giant Royal Dutch Shell and France's Total joined Brazilian state operator Petrobras in a joint bid to win Monday's auction to develop the huge Libra oilfield.
The four energy giants won 35-year concessions, with Petrobras taking a 40 per cent stake. Shell and Total both secured a 20 per cent stake, with CNOOC and CNPC taking 10 percent each.
The site holds an estimated eight to 12 billion barrels of oil. Brazil currently has 15.3 billion barrels of proven reserves, the second-largest in South America after Venezuela.
The concessions are for developing huge so-called "pre-salt" oil deposits found six years ago beneath a layer of salt deep below the Atlantic Ocean off Brazil's coast.
