Oil prices fall on news from China, Saudi Arabia and Iran

Oil prices retreated Wednesday as US crude output increased more than expected.

A report released Wednesday showing a bigger than expected increase in United States crude stockpiles has fuelled fears of a global glut which have depressed prices for more than a year.

USA crude for December delivery climbed 40 cents to $45.60 a barrel, having settled down $1.09, or 2.4 percent, in the previous session.

US oil inventories rose by 8 million barrels last week, as another week of refinery downtime meant fewer barrels of oil were processed and more flowed into storage.

A meeting between members and nonmembers of the Organization of the Petroleum Exporting Countries on Wednesday didn’t produce an agreement about production cuts, as widely expected by analysts.

A meeting of OPEC and non-OPEC oil market experts in Vienna later in the day may shed further light on the group’s position of maintaining production at current levels as prices remain muted.

Reports showed that the bond ratings agency downgraded its 2016 forecasts for both the Brent and West Texas Intermediate benchmark crude oil indexes by $4.

Brent crude for December LCOc1 fell 56 cents to $48.15 a barrel by 0945 ET.

“This was a big build in crude oil inventories…but the market held”, said Wolfe Research in a note. A day earlier, Nymex oil prices eased up 1 cent, or 0.02%. The contract fell $1.37 to $45.89 on Monday, the lowest close since 2 October. In September, Iran produced 2.9 million bpd, according to OPEC.

Meanwhile, the cartel continues to exceed its own quota of 30 million bpd for the 16th consecutive month trying to protect its share in the world oil market.

Investors are also anxious about the world economy and its impact on oil demand as growth in China slows.

“The strength in products is definitely helping crude”, Pete Donovan, broker at New York’s Liquidity Energy, said, referring to the near 3 percent rise in gasoline prices.

Torbjorn Tornqvist, chief executive at trading house Gunvor, said he did not expect the oil price to rise beyond normal volatility levels at least until mid-2016.

The gains came despite mixed news on USA inventories, underscoring how used to bad news the crude market has become. The Reuters poll had forecast a decline of 900,000 barrels for gasoline and 1.3 million for distillates.