Oil extends the drop in Asia as crude reserves set to grow

FXStreet (Mumbai) - Oil benchmarks on both sides of Atlantic are seen making minor-recovery attempts in early Europe, having booked almost 7% loss the day earlier as oversupply worries hit investors’ sentiment.

EIA stockpiles report in focus

Currently, WTI drops -0.33% to 29.80, while the Brent oil falls -0.52% to 32.56. Oil prices extended the slide in Asia today after the API data showed a bigger than expected jump in the crude reserves and exacerbated oversupply concerns.

The API report showed that US crude inventories had increased by 3.8 million barrels to 500.4 million barrels over the week to January 29, with total US reserves already at their highest levels since the 1930s.

Moreover, fading hopes of any resolution on the production levels between OPEC and non-OPEC producers also continue to curb investors’ appetite for the black gold. While persisting worries over Iranian supplies flooding the already saturated markets also acts a big drag on the oil prices.

Looking ahead, markets eagerly await the official government data released by the Energy Information Administration (EIA) later today, with markets forecasting a jump of about 4 million barrels, after an increase of 8.38 million barrels seen a week before.