Brent crude rates dip towards $102 a barrel
Brent crude oil fell for a fourth straight day on Wednesday to its lowest in more than a year, dipping towards $102 a barrel as strong supplies overshadowed fears of disruptions from violence in Opec members Iraq and Libya.
The international oil benchmark has fallen 11 per cent since mid-June as the surge by Islamic State militants in northern Iraq has yet to lead to any major supply outage, while global crude output has been rising.
Output from the Organisation of the Petroleum Exporting Countries (Opec) rose to a five-month high above 30 million barrels per day (bpd) in July, the IEA said, with Saudi Arabia and Libya more than offseting declines in Iraq, Iran and Nigeria.
Demand in China, the world's second-largest oil consumer, also slipped in July.
"Brent prices have been in a steady decline and I think the background of that is that the market is forming the view that any supply disruptions are not on the immediate horizon," said chief market analyst Ric Spooner of CMC Markets.
Brent for September delivery fell 24 cents to $102.78 a barrel by 0815 GMT. The contract, which expires on Thursday, dropped as low as $102.37, the weakest since July last year. The Brent contract for October delivery was down 25 cents at $103.64 a barrel.
US crude was down 17 cents at $97.20 a barrel, slipping for a second straight session. It narrowed its discount to Brent to the smallest in almost three weeks.
The US Energy Information Administration will release its weekly oil inventories report at 1430 GMT. The agency said on Tuesday that US crude production averaged an estimated 8.5 million bpd in July, the highest level since April 1987.
Data from industry group American Petroleum Institute showed that US crude inventories rose 229,000 barrels last week to 364.2 million barrels.
Stocks at Cushing, Oklahoma, delivery point of the US crude benchmark, rose 469,000 barrels.
Brent prices have retreated in view of Opec's ability to ramp up production and the absence of negative news on supplies despite the political conflicts, said Ben Le Brun, markets analyst in Sydney.
The unrest in Iraq has yet to disrupt significant amounts of oil from the second-largest producer in Opec, though some small fields have been shut in the autonomous Kurdish region.
In Libya, oil exports have been slowly recovering despite renewed violence between armed factions in the country.