[LONDON] Oil fell below US$55 a barrel on Wednesday as US government data showed domestic crude stockpiles at all-time highs.
EIA/S Brent crude futures were down US$1.80 cents at $54.63 by 1500 GMT. US crude traded at US$48.89, down US$1.13, having reached a high of US$51.14 earlier in the session.
Crude had come under pressure on Tuesday from International Energy Agency (IEA) forecasts of continued supply growth in the United States to 2020 despite lower prices, and of a possible further rise in stocks this year. "The supply growth in 2015 is likely to continue unabated, albeit at a somewhat lower rate," Fereidun Fesharaki at Facts Global Energy said in a market note. "This all means a weak market in 2015 and even lower oil prices. Demand rebound will not save the oil market."
After more than halving since June, oil prices have rallied by more than 20 per cent in the last four weeks. Kuwaiti Oil Minister Ali al-Omair said on Wednesday crude prices could rise to US$60 a barrel by the end of the year.
But analysts agreed with IEA predictions that following the crash, oil prices would stabilise well below the highs of more than US$100 a barrel seen in the last three years.
Jefferies Bache analysts said Brent and U.S. crude, known as West Texas Intermediate (WTI), would fall in the short term. "We still expect fresh WTI lows and an ultimate decline towards the US$40 area," they said in a note to traders. "Assuming our US$40 WTI target is achieved, a nearby Brent price in the US$48 area would be implied." "All in all, we are maintaining a bearish stance."