Oil turned lower on Thursday after posting gains earlier in the session as traders look ready to test new lows for crude prices with worries persisting over a global glut.
Brent crude futures were down 15 cents at $44.67 a barrel at 0715 GMT, after spending much of the Asian trading day in positive territory. They fell 2.6 percent in the previous session to their lowest since November.
U.S. crude futures were down 14 cents $42.39 a barrel, after also spending much of the day trading higher. On Wednesday, they settled down at $42.53, after touching their lowest intraday level since August 2016.
Since peaking in late February, crude has dropped around 20 percent, with only brief rallies, completely erasing gains at the end of the year in the wake of the initial OPEC-led production cut.
The Organization of Petroleum Exporting Countries (OPEC) and other producers agreed to cut output by 1.8 million barrels per day from January for six months, subsequently extended for a further nine months.
“The market didn’t actually buy into the cut for fundamental reasons. It bought into it because it was a shift in strategy from OPEC and it gave the market hope,” said Matt Stanley, fuel broker at Freight Investor Services in Dubai.
“But (OPEC) didn’t do enough and … other producers were always going to fill the void,” he said.
With output rising in Nigeria and Libya, countries exempt from the deal, and output surging in the United States, which was not part of the agreement, many bulls appear to have thrown in the towel.
The market largely shrugged off comments overnight from Iran’s oil minister that members of OPEC are considering deeper cuts in production.
A bigger-than-expected cut in U.S. crude stockpiles reported overnight is also barely shifting the dial.
Crude inventories fell 2.5 million barrels in the week to June 16, surpassing analyst expectations for a decrease of 2.1 million barrels, as imports rose marginally by 56,000 barrels per day, the U.S. Energy Information Administration said on Wednesday.
Gasoline stocks fell 578,000 barrels, compared with analyst expectations for a seasonally unusual 443,000-barrel gain, which had been seen as bearish in the market.
Stocks of the motor fuel had also risen unexpectedly by 2.1 million barrels in the previous week, despite the start of the summer driving season.
(Editing by Joseph Radford and Sunil Nair)