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 Brent for December delivery had fallen 20 cents to $47.34 a barrel
by 1000 GMT, after settling the previous session down 45 cents. U.S.
crude dropped 37 cents to $43.61 a barrel, having ended the previous
day down 62 cents.
The U.S. benchmark broke technical support, dropping 65 cents, to
hit a nine-week low earlier in the session.
An expected further build in U.S. crude stocks and a glut of refined
products again raised concerns of an oversupplied market.
"We expect that the focus of the oil markets is rapidly shifting to
the surplus of refined products," analysts at Jefferies said, adding
that the bearish mood was aggravated by dropping refining
profitability while demand growth slowed.
U.S. production cuts - from a peak of around 9.6 million barrels a
day to around 9.1 million - and optimism over demand have failed to
translate into higher prices, said Ric Spooner, chief market analyst
at Sydney's CMC Markets.
U.S. commercial crude stockpiles are expected to have risen for a
fifth straight week, by an average of 3 million barrels to 479.6
million, in the week ended Oct. 23, a Reuters survey showed.
While stocks of distillates, which include diesel and jet fuel, were
seen falling by 2 million barrels, storage utilization for
distillates in the United States and Europe is nearing historic
highs, Goldman Sachs said on Monday. [EIA/S]
Longer-term, non-OPEC supply could fall next year for the first time
since 2008 as deep cuts in capital expenditure by publicly traded
companies lead to a 700,000 barrels-per-day fall in production to
52.7 million bpd, Jefferies added.
Analysts from the Energy Aspects think-tank added that some 5
million bpd of projects, which were meant to be completed from
2017-19, had been delayed or canceled: "All of this will start to
show up in steep declines in 2017 supplies."
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Investors await the outcomes of key policy talks this week,
including a U.S. Federal Reserve meeting that starts later on
Tuesday and China's fifth plenum, a meeting of the Communist Party's
central committee, that began on Monday.
Oil prices could get support from short-covering if investors think
the Fed will take a dovish view towards interest rates at its
meeting, Spooner said.
"The Fed and a weaker dollar could save the day, as could improved
supply statistics. That could still mean that this downswing might
turn out to be a correction of the latest rally, not the beginning
of a major move lower," Spooner said in a blog post.
China's plenum is expected to set a 7 percent annual growth target
in its 13th five-year plan, a blueprint for economic and social
development between 2016 and 2020.
(Editing by Dale Hudson)
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