U.S. oil falls to lowest in over two months on swelling inventories

Separately, shipping data showed tankers with nearly 20 million barrels of Iraqi oil due to sail to the United States in November, almost 40% above the amount booked to arrive in October. The IEA also forecasts that non-OPEC supply will decline by 600,000 per day in 2016, as US shale producers struggle to maintain output at lower prices. Oil stockpiles in developed countries are at the highest since the financial crisis as global supply outpaced demand growth, the group said in a report.

There were signs that traders expect more price falls, with the number of options taken to sell crude if prices fall to $40 or even $25 per barrel soaring.

The 12-member OPEC cartel will meet on December 4 in Vienna for their next output meeting.

There is global concern about slowing demand for crude in the world’s second largest economy.

The IEA, in its Monthly Oil Market Report, said that ballooning global stockpiles of crude and oil products could worsen the overhang into next year. The session low was $44.30, the lowest since August 27.

It is not only crude oil production that has spiked; other refined fuels are also leading to inventory growth. On the NY Mercantile Exchange, West Texas Intermediate futures were trading up 0.5 per cent at $US41.96 a barrel.

The EIA report “will provide vital clues for the near term price development”, said Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm EY.

“The impact of oil’s steep price plunge on end users is unlikely to be repeated and economic conditions are forecast to remain problematic in countries such as China”, the IEA said. Futures fell 8% the past week, the biggest decline since March.

At the same time, the Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, continued to slip, falling 3.7 percent.

There were no risers on the French market, with aerospace and defence company Safran topping the fallers with a near 6% slide.

Gasoline futures recently fell 2.1% to $1.2462 a gallon.