Investing.com - Oil futures fell to levels not seen since the peak of the global financial crisis in 2009 on Thursday, after a surprise buildup in U.S. oil stockpiles underlined concerns about a growing global oil glut.
Crude oil for delivery in October on the New York Mercantile Exchange slumped to an intraday low of $40.82 a barrel, a level not seen since March 2009, before trading at $41.03 during European morning hours, down 23 cents, or 0.56%.
A day earlier, New York-traded oil futures plunged $1.85, or 4.29%, to end at $41.27 after data showed that oil supplies in the U.S. rose unexpectedly last week.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 2.6 million barrels in the week ended August 14, against expectations for a decline of 0.8 million barrels.
Total U.S. crude oil inventories stood at 456.2 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Nymex oil futures have been under heavy selling pressure in recent months as worries over high domestic U.S. oil production weighed.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. increased by two last week to 672, the fourth straight weekly gain.
There are still about 60% fewer rigs working since a peak of 1,609 in October, though the pace of declines has slowed considerably in recent weeks, fueling concerns that U.S. shale production could rebound in the months ahead.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery shed 17 cents, or 0.37%, to trade at $46.99 a barrel after hitting a daily low of $46.76, the weakest level since March 2009.
On Wednesday, London-traded Brent prices lost $1.65, or 3.38%, to close at $47.16, as worries about slowing demand from China and a glut of supply drove down prices.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $5.96 a barrel, compared to $5.89 by close of trade on Wednesday.
In China, the Shanghai Composite took investors on another volatile ride on Thursday, falling by as much as 2.2% after the open, before paring losses after the midday break, and then plunging again in the last hour of trade to end down 3.4%.
Chinese stock markets sold off sharply earlier in the week amid growing concerns over the health of the Asian nation's economy and worries that Beijing may allow the yuan to continue to depreciate, fueling fears over a currency war that could destabilize the global economy.
Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for oil will decline.
Worries that China’s recent devaluation of the yuan will slow down the country’s import of oil also weighed.
The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Minutes of the Federal Reserve's July meeting published on Wednesday showed that policymakers express broad concerns about lagging inflation and the weak global economy, leading some investors to question the likelihood of a rate hike in September.
The minutes added that Fed officials were concerned about "recent decreases in oil prices and the possibility of adverse spillovers from slower economic growth in China."
The U.S. is set to release data on initial jobless claims, existing home sales and manufacturing activity in the Philadelphia region later Thursday.
Despite a recent batch of upbeat economic data, some traders believe the Fed could postpone raising interest rates next month as officials are likely to remain concerned over global growth and inflation pressures due to China’s shock currency devaluation move and weak commodity prices.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 96.50 early Thursday, little changed on the day after falling sharply on Wednesday, as prospects for a rate hike in September by the Fed appeared dim after the release of July meeting minutes.