WTI oil futures fall below $49 amid U.S. supply glut

Investing.com - West Texas Intermediate oil futures declined for the sixth consecutive session on Tuesday, as lingering concerns over a supply glut in the U.S. drove down prices.

On the New York Mercantile Exchange, crude oil for delivery in April slumped 55 cents, or 1.11%, to trade at $48.90 a barrel during European morning hours after hitting an intraday low of $48.72.

A day earlier, Nymex oil tumbled $1.36, or 2.68%, to end at $49.45.

Industry research group Baker Hughes (NYSE:BHI) said Friday that the number of rigs drilling for oil in the U.S. fell by just 37 last week, the smallest weekly drop this year and compared to a decline of 84 rigs in the preceding week.

The number of rigs drilling for oil in the U.S. totaled 1,019, the lowest since August 2011. The number of oil rigs has declined in 16 of the last 19 weeks since hitting an all-time high of 1,609 in mid-October.

However, oil supplies in the U.S. stand at the highest level in at least 80 years, indicating that cheap prices have yet to affect output.

Market participants looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 4.0 million barrels in the week ended February 20.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery dropped 50 cents, or 0.85%, to trade at $58.40 a barrel. Prices touched a daily low of $58.13, the weakest level since February 19.

The April Brent contract sank $1.32, or 2.19%, on Monday to settle at $58.90 a barrel.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $9.50 a barrel, compared to $9.45 by close of trade on Monday.

Crude prices rose briefly on Monday after the Financial Times reported that Nigeria's oil minister said that members of the Organization of Petroleum-Exporting Countries have discussed holding an emergency meeting if crude continues to slide.

Oil prices have fallen sharply in recent months as OPEC resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

Meanwhile, investors looked ahead to testimony from Federal Reserve Chairwoman Janet Yellen later in the day for further indications on when the central bank will start raising interest rates.

Elsewhere, the Eurogroup is expected to mull Greece's revised list of reform proposals after the debt-strapped country submitted a list of proposed economic reforms to Brussels around midnight on Monday.

"In the Commission's view, this list is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review," said a source.

The reforms must be approved by the country’s lenders in order for Greece to secure the four-month extension to its €240 billion bailout.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, tacked on 0.15% to 94.80.

Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.

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