Oil prices drop further as oversupply concerns persist

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Oil prices are extending losses in Asia trading ahead of US government data on oil inventories due out on Wednesday.

Brent crude, the international benchmark, was down 0.9 per cent at $54.55 per barrel in late morning trade, bringing it 4 per cent lower for the week so far. West Texas Intermediate, the US marker, was off 1.3 per cent at $51.15 per barrel, down 4.3 per cent this week.

Estimates released on Tuesday evening in the US by the American Petroleum Institute showed US oil stocks jumping by 14.2m barrels last week, more than 11m barrels above analyst expectations.

Official US government data on oil inventories are due out Wednesday morning in the US, but American stocks may not be the only thing exerting downward pressure on crude.

On Tuesday Norwegian energy group Statoil booked a $2.3bn impairment charge due to reduced long-term expectations for oil prices. Eldar Sætre, chief executive, acknowledged that global oil demand could peak by 2030 or sooner as the transition to cleaner forms of energy gathers pace.

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