Oil fell for a third day on Wednesday, dropping nearly 1 percent on concerns about rising U.S. production and another drop in financial markets after U.S. consumer prices rose more than expected, Reuters reported.
Brent crude futures fell 55 cents to $62.17 a barrel. The price has lost 11 percent since hitting a high above $71 in January and has now wiped out all its 2018 gains.
U.S. West Texas Intermediate crude futures dropped 77 cents to $58.42 a barrel.
U.S. consumer prices excluding energy and food accelerated at their fastest pace in a year, triggering a bounce in the dollar as prospects for more U.S. interest rate rises pushed up Treasury yields.
“In terms of a continuation of risk-off moves in the market, the U.S. economic data does not help,” BNP Paribas head of commodity strategy Harry Tchilinguirian said.
“With yields moving higher on the inflation number, let us see how equities will close the day,” he said, adding U.S. oil inventory data would also be closely watched.
The U.S. Energy Information Administration releases weekly inventory data later on Wednesday. Analysts expect a rise of 2.8 million barrels.
A report on Tuesday from the American Petroleum Institute (API) showed U.S. crude inventories rose by 3.9 million barrels, a higher level than forecast.
Natixis oil analyst Joel Hancock said the oil price rally in the second half of 2017 and start of 2018 has been fueled by expectations for robust demand, but higher inventories suggested seasonal weakness and possibly slowing growth in demand for oil.
But U.S. crude inventories are still set for their largest fall in the first quarter of the year in more than 20 years.
The Organization of the Petroleum Exporting Countries and its partners including Russia have curbed supply since January 2017 in a bid to drain global inventories.
The International Energy Agency on Tuesday raised its forecast for 2018 demand growth by 100,000 bpd to 1.4 million bpd, but said the rapid increase in global supply, particularly in the United States, could overtake consumption.
The physical markets are reflecting this concern. Prices for barrels of crude from the North Sea, Russia, the United States and Middle East have dropped to multi-month lows.
Additional reporting by Henning Gloystein; Editing by Edmund Blair
