Oil futures finished lower on Tuesday for a fourth-straight session, as lower price outlooks for this year and forecasts for a persistent global glut of supplies sent West Texas Intermediate crude back under $28 a barrel. March West Texas Intermediate crude lost $1.75, or 5.9%, to settle at $27.94 a barrel, after earlier attempts to rebound. Prices have now tallied a lost of more than 13% in four sessions. Based on the front-month contracts, they ended at their lowest level in nearly three weeks.
April Brent crude on London’s ICE Futures exchange sank $2.56, or 7.8%, to $30.32 a barrel. Read: Cheap oil for longer may trigger a new era of OPEC dominance, warns IEA
The U.S. Energy Information Administration cut its 2016 forecasts for West Texas Intermediate and Brent crude prices in a monthly report issued Tuesday. The government agency said it expects WTI prices to average $37.59 a barrel this year compared with a previous forecast of $38.54. The EIA also said it expects Brent crude to average $37.52 a barrel this year, compared with a previous forecast of $40.15.
“Continuing increases in global oil inventories are expected to keep oil prices under $40 a barrel through August,” said Adam Sieminski, EIA administrator, in a statement.
He also said that the increases in U.S. oil inventories, which have now topped 500 million barrels for the first time since 1930, will continue and may peak this year at 517 million barrels in April.