Oil prices underwent a selloff on Thursday with U.S. crude falling below the $50 a barrel level for the first time in more than a year amid persistent concerns about oversupply. New York-traded West Texas Intermediate crude futures fell 47 cents, or 0.93%, at $49.82 a barrel by 4:45 AM ET (9:45 GMT). That was its lowest level since Oct. 9, 2017. Brent crude futures, the benchmark for oil prices outside the U.S., traded down 74 cents, or 1.25%, to $58.35, after hitting its lowest level since Oct. 24, 2017.
Prices came under renewed selling pressure after data on Wednesday showing that U.S. crude inventories increased again last week, hitting their highest levels in more than a year. In its weekly report, the Energy Information Administration said oil stockpiles increased by 3.57 million barrels to 450 million barrels.
Prices also remained under pressure after Russian President Vladimir Putin indicated that he is comfortable with current levels, casting doubt on OPEC’s ability to move ahead with significant production cuts. Putin said Wednesday that prices of around $60 per barrel were “absolutely fine” as the Russian budget would be balanced at $40.
Saudi Arabia has been pushing OPEC and its non-OPEC allies, led by Russia, to agree to reduce production given the more than 30% decline in prices since last October.
Analysts believe that the group will announce a reduction of 1.1 million barrels per day when they meet in Vienna on Dec. 6-7. With the U.S. and Saudi Arabia producing at record levels and rising inventories in the U.S., investors have been concerned that OPEC will be unable to counteract increasing supply.
Traders will keep an eye on this weekend’s G20 summit where Putin is expected to meet on the sidelines with Saudi Arabia’s Crown Prince to discuss plans for output.
“We are now in contact with OPEC and if needed, we will continue this joint work,” Putin said referring to the current agreement to help stabilize markets.
In other energy trading, gasoline futures dropped 0.74% to $1.3659 a gallon by 4:51 AM ET (9:51 GMT), while heating oil lost 0.70% to $1.8223 a gallon. Natural gas futures traded down 1.87% to $4.611 per million British thermal units