By Keith Wallis
SINGAPORE (Reuters) - U.S. crude fell for a second session in early Asian trade on Tuesday as worries about the economic health of top energy consumer China and rising oil supply weighed on markets.
The front month contract for West Texas Intermediate (WTI)
The benchmark at one point posted its biggest daily loss in five months on Monday, dropping 6.9 percent to an intraday low of $31.29 although that was still nearly 20 percent above the more than 12-year low of $26.19 hit in mid-January.
Crude prices fell after China's purchasing managers index dropped to a three-year low in January, coupled with rising oil supplies, ANZ said in a note on Tuesday.
"Rising supply also suggests further downside risk to short-term prices. Output from OPEC rose to 33.1 million barrels per day last month as Indonesia's membership to the group was reactivated," the note added.
Investors are waiting on economic data from the Eurozone, including unemployment figures and producer prices, later on Tuesday to give oil markets further direction.
That came as U.S. commercial crude oil inventories likely rose by 4.7 million barrels last week to a new record high of 499.6 million barrels, a preliminary Reuters survey taken ahead of industry and official data showed on Monday.
Gasoline stocks likely rose 1.3 million barrels last week, while distillate inventories, which include heating oil and diesel fuel, were seen falling 1.7 million barrels.
The Reuters poll was taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API), due out later on Tuesday, and the U.S. Department of Energy's Energy Information Administration (EIA), due for release on Wednesday.
Russian Energy Minister Alexander Novak and Venezuelan Oil Minister Eulogio Del Pino discussed the possibility of holding joint consultations between OPEC and non-OPEC countries in the near future, the Russian Energy Ministry said on Monday.
But Goldman Sachs said on Monday it was "highly unlikely" OPEC producers would co-operate with Russia to cut oil output, while also being self-defeating as stronger prices would bring previously shelved production back onto the market.
That came as production from Iraq's southern oil fields dropped to an average of 3.9 million barrels per day (bpd) in January from a record 4.13 million bpd the previous month, the oil ministry said on Monday.
(Reporting by Keith Wallis; Editing by Richard Pullin)
