Oil fell below $62 a barrel this afternoon, placing it on course for a sixth consecutive fall and the longest losing streak since mid-December, after the focus sharpened on economic weakness and US data showed higher fuel stocks.
An OPEC report predicting it could take years for demand for its crude to recover from the financial crisis added to bearish sentiment.
US light crude for August delivery dropped $1.16 to $61.77 a barrel by 1.58pm. It settled $1.12 lower at 62.93 a barrel yesterday, ending a fifth straight day of losses.
London Brent crude eased by 90 cents to $62.33.
Distillate inventories, including diesel, were also projected to have risen, while crude stocks were forecast to be lower as refiners cut imports because of modest demand.
Figures from the American Petroleum Institute (API) late yesterday showed distillate stocks and gasoline stocks had risen more than expected.
“It looked like gasoline demand had started to get better and now suddenly looks bad. It could be for a couple of reasons: it could be a price response or it could just be that the economy is just not out of the woods yet,” said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo.
Oil prices have dropped from peaks above $70 a barrel last month, the highest this year, as expectations of an early economic recovery have faltered and US fuel stocks have risen in line with subdued demand.
Reuters