Futures slid 0.5 percent after advancing 1.2 percent earlier. Oil may slip below $40 unless there are sustained inventory declines and a drop in the rig count, according to Goldman Sachs. U.S. crude stockpiles probably fell by 2.85 million barrels last week, a Bloomberg survey showed before an Energy Information Administration report Wednesday.
“The market is still searching for a new equilibrium, and in particular for a lower band for the oil-price range,” said Jan Edelmann, an analyst at HSH Nordbank AG in Hamburg. Investor sentiment is “close to its lows,” which may cause a “renewed downswing in prices to sub-$40.”
West Texas Intermediate for August delivery was at $44.18 a barrel on the New York Mercantile Exchange, down 22 cents, at 9:37 a.m. London time. Total volume traded was about 31 percent above the 100-day average. The contract climbed 17 cents to $44.40 on Monday, advancing after a weekly loss.
Brent for September settlement was down 26 cents at $46.62 a barrel on the London-based ICE Futures Europe exchange, after rising 17 cents to $46.88 on Monday. The global benchmark crude traded at a premium of $2.24 to September WTI.