Oil price fell in Asian trade on Thursday, with United States crude hitting the lowest level in more than two weeks with worries of global oversupply after U.S. crude inventories rose to a record high.
That increase came despite seasonal refinery utilisation hitting an 11-year high, while a rise in the dollar index .DXY put further pressure on oil prices.
Brent crude futures LCOc1 fell 36 cents to $38.90 a barrel as of 0331 GMT. It ended up 12 cents in the previous session after touching a session peak of $40.61.
The front-month contract for U.S. crude futures CLc1 dropped 46 cents to $37.86 a barrel, after dropping to $37.74 earlier, the lowest since March 16. It settle up 4 cents in the previous session following a gain of 3 percent earlier in the session.
Tony Nunan, an oil risk manager at Japan’s Mitsubishi Corp said Prices will “zig-zag” for the rest of the year.
“Oil prices will trend down again … $35 a barrel will be the support level. Low prices are not sustainable in the long-run,” Nunan added.
U.S. crude stockpiles rose by 2.3 million barrels to 534.8 million barrels in the week to March 25, the seventh week at record high levels, data from the U.S. Energy Information Administration shows.
But the increase was less than analysts’ expectations of a 3.3 million barrel build after crude imports fell 636,000 barrels per day to 7.4 million bpd.
Refinery crude runs rose by 414,000 barrels per day (bpd) and refinery utilisation rates rose 2 percentage points to 90.4 percent of total capacity, the highest seasonal rate since 2005.
Crude prices, which have risen about 50 percent since mid-February, have started to track lower in the past week.