Oil futures remained in retreat mode for a second successive session on Thursday (1 September) as overnight US inventory data weighed on trading sentiment. At 2:17pm BST, the Brent front month futures contract was 1.11% or 52 cents lower at $46.37 per barrel, while the West Texas Intermediate fell 0.98% or 44 cents to $44.26 per barrel.
Data released overnight by the US Energy Information Administration said crude stocks rose by 2.3m barrels stateside to 525.9m barrels in the week to 26 August.
The rise exceeded market forecasts of an increase in the 700,000 to 825,000 barrel range, prompting an early oil market sell-off in Asian trading. The trading pattern became firmly entrenched when Europe opened for business, with dollar bulls also out in full force.
Members of the Organization of the Petroleum Exporting Countries (OPEC) are due to meet in Algiers on the sidelines of the International Energy Forum (IEF) on 26-28 September to revive global output freeze talks that stalled in April.
However, analysts remain sceptical of anything concrete emerging from the Algiers talks. In a note to clients, Commerzbank analysts said: "There is still lots of correction potential, given the overhang of speculative long positions and exaggerated hopes for an output freeze."
Nonetheless, speaking in Tokyo, Saudi Foreign Minister Adel al-Jubeir said OPEC and non-OPEC oil producers were increasingly moving towards "a common position, toward a common effort."
"If you want to have an impact then all of us have to shoulder the responsibility, and over the past five or six months, I believe that there has been an increasing realisation that this is a collective effort," he concluded.
Away from the oil market, the strength of the dollar dented confidence in major precious metals. At 2:39pm BST, Comex gold for December delivery fell 0.14% or $1.80 to a two-month low of $1,309.60 an ounce.
With a US interest rate hike back on the cards, analysts at Kitco Metals said more bad news was on the horizon for gold investors adding that "the path of least resistance continues to be lower." Kitco's view was echoed by analysts at Natixis who opined that a US rate hike could arrive as early as December.
Elsewhere, Comex silver slipped 0.03% or 2 cents to $18.71 an ounce. Concurrently, spot platinum was lower by 0.84% or $8.88 to $1,043.23 an ounce, completing declines across the precious metals market board.
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