Oil prices in 2013
Workers adjusting the valves of oil pipes at West Qurna oilfield in Iraq. Reuters

Oil futures fell on Wednesday (8 March) to their lowest level since mid-January, on higher-than-expected US crude inventories and Saudi energy minister Khalid Al-Falih's comments that an extension of Opec's production beyond the summer was not a certainty.

In a scheduled data release, the US Energy Information Administration (EIA) reported an 8.2m barrel jump in crude inventories stateside, raising the total of commercial stockpiles to a record weekly level of 528.4m by the end of last week; the ninth successive rise on record.

Concurrently, the American Petroleum Institute noted overnight that domestic crude inventories rose by 11.6m barrels in the latest week.

At 6:53pm GMT, the Brent contract for May delivery was down 3.76% or $2.10 at $53.82 per barrel, while the West Texas Intermediate (WTI) April contract was down 4.16% or $2.21 at $50.93 per barrel, as market sentiment turned negative.

Overnight, Saudi energy minister Khalid Al-Falih told CERAWeek in Houston, Texas, USA, one of the world's largest energy sector events, that the oil market should not get ahead of itself, and believe in speculative chatter suggesting Opec would extend its ongoing cuts beyond their scheduled expiry date of end-June.

"Don't believe in wishful thinking that Opec would underwrite the investment of others by perennially supporting the market. Saudi Arabia has cut production by more than what we promised [in December 2016], but we will not bear the burden of free riders," Al-Falih noted.

He joked that while the global oil industry was witnessing shoots of recovery, Riyadh was "moderating the watering" of those green shoots.

Commenting on the intraday market movement, Jason Schenker, President of Prestige Economics, said the oil market is far from balanced. "Although, Opec has provided a price floor for the moment, market rebalancing has to run its course."

Fawad Razaqzada, market analyst at Forex.com, said a correction of some sort in crude oil prices was inevitable.

"This may well have started on Wednesday. In my opinion, the rising crude inventory levels in the US have been the number one reason why prices have been unable to move further higher after the Opec had agreed with some non-Opec members to limit production back in November."