Oil futures were down in London trading Wednesday as demand continues to be weak in Europe and China, and stockpiles stack up.
At 0922 GMT, the June contract for ICE Brent crude was trading down 37 cents, or 0.36%, at $102.23 a barrel. Nymex June crude was down 70 cents, or 0.74%, at $93.51.
Brent prices are still far lower than their February highs of nearly $119 a barrel, which "suggests that in the tug of war between tight global fundamentals and the negative sentiment created by weak European product markets and fears of further Chinese slowdown, the latter currently prevail," wrote analysts at Goldman Sachs.
Clarity on whether the dip is seasonal or runs deeper is unlikely to come for another month, they wrote, and in the meantime the price is "skewed to the downside."
Analysts at oil brokerage PVM agreed. "The body language from Brent at the moment suggests a contract ready to take another look at the territory below $100/bbl," they wrote.
U.S. crude oil stocks are close to record highs, and the International Energy Agency said Tuesday that crude-oil output from the Organization of the Petroleum Exporting Countries rose by 200,000 barrels a day in April to 30.7 million barrels a day.
"The days of calling crude oil going to $200/bbl are over," wrote analysts at Petromatrix, who noted that the surge in production from OPEC countries and a strong dollar, which makes oil expensive outside the U.S., are both drags on the Brent price, which is gaining little support even from the sanctions that are keeping Iranian oil out of the equation.
The EU Tuesday raided several oil companies in the EU and Norway due to concerns about their disclosures to Price Reporting Agencies, but the Petromatrix analysts played this down.
"The system of PRAs is certainly not perfect but we think that the European consumers have suffered much more over the last 12 months from the price support provided by the EU's ill-designed Free Trade Agreement with South Korea than from quote reporting to the PRAs," they wrote.
At 0924 GMT, ICE June Gasoil was down $7.50, or 0.87%, at $853.25, while gasoline for June was down 101 points, or -.36%, at $2.8275.
