Oil prices fell for a third day on Wednesday on evidence of rising global supply despite the imposition of U.S. sanctions next week that are already curbing Iranian crude supply.
Benchmark Brent crude oil LCOc1 was down 40 cents at $75.51 a barrel by 1410 GMT. The contract fell 1.8 percent on Tuesday, at one point touching its lowest since Aug. 24 at $75.09.
U.S. light crude CLc1 was 25 cents down at $65.93. It hit a two-month low of $65.33 a barrel on Tuesday.
New U.S. sanctions on Iran begin on Nov. 4 and Washington has made it clear to Tehran’s customers that it expects them to stop buying any Iranian crude oil from that date.
Imports of Iranian crude by major buyers in Asia hit a 32-month low in September as China, South Korea and Japan sharply cut their purchases ahead of the sanctions, government and ship-tracking data showed.
But oil supply from other countries is rising.
The top three producers – Russia, Saudi Arabia and the United States – pumped 33 million barrels per day (bpd) in September, Refinitiv data shows, an increase of 10 million bpd since the start of the decade.
Russian oil output has reached 11.41 million bpd, a level unseen since the collapse of the Soviet Union in 1991, an industry source told Reuters on Wednesday.
Inventories are rising and the American Petroleum Institute reported U.S. crude stocks rose 5.7 million barrels last week, above analysts’ forecasts. Official U.S. data on inventories will be published at 1030 EDT (1430 GMT).
Oil market sentiment received some support from equity markets, which pulled back from 20-month lows on Wednesday after pledges by China to support its markets.
But both crude benchmarks are more than $10 a barrel below four-year highs reached on Oct. 3 and on track for their worst monthly performance since July 2016.
Oil has been caught in the global financial market slump this month, with equities under pressure from the trade war between the world’s two largest economies, the United States and China.
The United States has already imposed tariffs on $250 billion worth of Chinese goods and China has responded with retaliatory duties on $110 billion worth of U.S. goods.
Hedge funds are still overwhelmingly long on oil and may have to liquidate positions if prices keep falling, accelerating a market sell-off, analysts say.
“Signs of price angst are pervasive and given the herding mentality of market players, the worse may not yet be over,” said Stephen Brennock, analyst at London brokerage PVM Oil.