Oil prices fell early on Thursday as a build in U.S. crude inventories and record Saudi Arabian production weighed on markets.
U.S. West Texas Intermediate (WTI) crude futures were trading at $41.34 per barrel at 0032 GMT, down 37 cents, or 0.9 percent, from their last settlement.
International Brent crude futures were at $43.72 a barrel, down 33 cents, or 0.8 percent.
Oil fell sharply after data from the U.S. Energy Information Administration showed crude inventories rose 1.1 million barrels in the week ended Aug. 5. Analysts polled by Reuters had expected a 1.0 million-barrel crude draw instead.
“Crude oil stocks rose 1.06 million barrels to 523.6 million barrels. The unexpected rise was driven by reduced operating rates at refineries, which fell 1.1 percent to 92.2 percent of capacity,” ANZ bank said on Thursday.
“Bearish supply-side news also weighed on the market, with Saudi Arabia reporting a record 10.67 million barrels per day production in July,” it added.
However, other analysts said that this was not necessarily a bearish market signal as Saudi’s record output would be met by strong demand and supply disruptions elsewhere.