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Oil prices skid lower as oversupply worries weigh
[NEW YORK] Oil prices tumbled on Wednesday as expectations of another increase in US inventories added to worries about the global oversupply.
US benchmark West Texas Intermediate for delivery in October slid US$1.79 to US$44.15 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for October, the global benchmark, closed at US$47.58 a barrel in London, down US$1.94 from Tuesday's settlement.
Investors are "anxious" about upcoming official data on US petroleum inventories, said Bob Yawger of Mizuho Securities.
The Department of Energy (DoE) will release its weekly report Thursday, a day later than usual because of Monday's Labor Day holiday.
The report is "going to be a very important one. It's coming after last week, when we had a big storage build and it's basically the beginning of (refinery) maintenance season," said Yawger.
"The market anticipates a pretty good build and also you'll get a reduction in the refinery utilization rate, leaving lots of crude oil on the sidelines." Analysts expect commercial crude-oil inventories rose by 250,000 barrels in the week to September 4, according to a Bloomberg News.
At the same time, the DoE predicted in a new report Wednesday that US crude-oil production would decline through the middle of next year in response to low oil prices, before picking up again in late 2016 on an expected rise in oil prices.
US crude output fell by 140,000 barrels per day in August from July. The government lowered its 2015 production estimate to 9.2 million barrels per day, 100,000 barrels lower than its month-ago forecast.
Even so, total US oil output this year is expected to be the highest since 1972.