October Brent crude LCOV5, -0.59% on London’s ICE Futures exchange also fell $1.65, or 3.4%, to $47.16 a barrel.
US West Texas Intermediate (WTI) crude oil already slumped over 4 per cent on Wednesday to hit a 6-1/2-year low as a huge unexpected stockpile build in the United States reinforced concerns about a growing global oil glut.
While US crude stockpile data due Wednesday is projected to show a decline for a fourth week through August 14, inventories will remain more than 90 million barrels above the five-year average for this time of year.
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Shares of Exxon Mobil, BP, Marathon Oil, Chevron and ConocoPhillips have all slid recently to multiyear lows.
But US traders are girding for further weakness with the end of summer driving season.
“While this is a clear sign that low prices will lead to less production, it was not enough to convince people yesterday”, Commerzbank senior oil analyst Carsten Fritsch said.
U.S. RBOB gasoline had the biggest percentage loss in the oil futures complex, dropping 2.46 cents, or 1.5 percent, to settle at $1.5346 a gallon. Refinery utilization in the U.S. Midwest region fell to 92.2 percent last week, the biggest weekly drop in eight months.
The price of a barrel of oil dipped below the $41 level on Wednesday, dragging the Canadian dollar below 76 cents US in the process.
Fears that growth in China, the world’s second-largest economy and top energy importer, is slowing over the long term are affecting risk assets around the world.
Energy companies make up roughly 7 percent of the market value of the Standard & Poor’s 500, but that amount was much higher earlier this year. Energy companies have slashed jobs and curtailed drilling activity in response. But instead the agency said commercial inventories increased by 2.6 million barrels last week. More Iranian oil is expected on the market when economic sanctions are lifted.
“The bigger picture is one of strong demand for gasoline and falling oil output, which should give some support to prices over the rest of the year”, analysts said.
US oil futures edged closer to the $US40 a barrel mark after dropping to fresh six-year lows in the previous session.