The bank maintains its near-term target for US crude at $45 a barrel, but warns that risk is skewed substantially lower.
In rupee terms, the price of Indian basket decreased to Rs3,131.25 per bbl on compared to Rs3,192.91 per bbl the previous day even as the rupee closed stronger at Rs63.
The low price of crude oil is crimping investments in exploration and production and prompting many companies to cut back on staff. Labor Department data show new claims for unemployment in Texas increased 2.5 percent for the week ending August. 1.
Ignoring a bigger-than-expected weekly drawdown in US crude stockpiles announced by the Energy Information Administration (EIA), traders and investors focused on lower refining margins likely to result from the higher inventories for gasoline and distillates that include diesel.
“Downside momentum continues and there’s really at this stage no sign of release from the oversupply problem, which is what’s putting pressure on prices“, Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone.
“The sentiment is very negative, so the market is looking for reasons to go lower”, said Richard Mallinson, an analyst with Energy Aspects.
Brent was down 55 cents, or 1.1 percent, at $48.97 a barrel by 12:10 p.m. EDT (1610 GMT), after hitting a January 30 low of $48.55.
The number of rigs has fallen sharply since oil prices fell past year.
But U.S. crude stocks remain at much higher levels than the long-term seasonal average, Fritsch said.
In global crude, September production across the North Sea’s Brent, Forties, Oseberg and Ekofisk grades is expected to be at around 1 million barrels per day, the highest for the year, loading data shows.
Meanwhile, Brent crude for September delivery LCOU5, -0.89% was up 42 cents, or 0.9%, to $49.94 a barrel, but on track for a weekly drop of 4.4%.
Oil prices have been tumbling since the summer of 2014, dropping below $45 a barrel at the end of 2014, due to a weakening demand in industrialised countries following the financial crisis. A widely-watched measure of China’s manufacturing sector earlier declined to a two-year low.