Crude oil prices are diving deep into negative territory in early Monday trading.
Oil prices settled lower for a third straight session Wednesday, even though official data showed a bigger-than-expected drawdown in USA crude stockpiles.
Brent crude futures LCOc1 closed down 12 cents or 0.2 percent to $56.00 a barrel, having lost nearly 2.5 percent on Monday.
Oil prices fell on Wednesday, pulled down by caution that rising USA crude output could scupper a rally that lasted for most of the third quarter.
On October 3, 2017, the API reported that USA crude oil inventories fell by 4.07 MMbbls (million barrels) on September 22-29, 2017.
Crude oil prices attempted to move higher in U.S.
Rising US production has held down WTI prices, while Brent's price is heavily influenced by policy directions from Opec. The market expected that USA crude oil inventories would have fallen by 0.76 MMbbls during the same period.
West Texas Intermediate for November delivery declined $1.41 to $50.26 a barrel at 11:39 a.m. on the New York Mercantile Exchange.
It might look tempting to take advantage of the current price strength momentarily, but if OPEC acts responsibly now, short-term pain will lead to a long-term gain and not the other way round, said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd.
Oil prices which jumped last week by around three to four percent reversed their gains at the beginning of this week due to growing concerns regarding a sudden oil buildup as well as the rise in the USA production that has sent oil prices down during the past couple of months. The contract fell 67 cents, or 1.2 per cent, in the last session.
As U.S. refineries recover, near-term future prices have started to retreat again, while physical market prices, a relatively reliable indicator for futures market, have shown a more dramatic reversal. Cushing, Oklahoma crude stockpiles rose by 1.8 MMbbl, according to a forecast compiled by Bloomberg.
Although the headline draw was larger than expected, the sharp build in gasoline stocks had a significant impact in damaging confidence with some concerns over a potential sharper-than-expected seasonal drop in demand.