By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell more than 1 percent on Thursday, with global benchmark Brent settling not far from 2004 lows, after fresh supply builds at the delivery point for U.S. crude futures added to worries about a global glut.
Trading was thin, however, as uncertainty over how much longer oil prices could stay from hitting 11-year lows kept some players sidelined, analysts said.
"There could be a short-covering bounce here, for all we know. I'm hoping for that, so I can short the hell out of it," said Tariq Zahir, an oil bear who trades mostly crude oil spreads at Tyche Capital Advisors in New York.
Brent (LCOc1) settled down 33 cents at $37.06 a barrel, finishing less than $1 above its 2004 low of $36.40.
U.S. crude's West Texas Intermediate (WTI) futures (CLc1) ended the session down 57 cents, or 1.6 percent, at $34.95 a barrel, reaching a session low of $34.63. On Monday, WTI hit a seven-year low of $34.53.
Volume in WTI was just under 180 million barrels due to fewer trades, versus 750 million barrels from a week ago.
Market intelligence firm Genscape reported an inventory increase of 1.4 million barrels at the Cushing, Oklahoma delivery hub for the U.S. crude's West Texas Intermediate (WTI) futures, traders who saw the data said.
Genscape's report on Cushing came a day after the U.S. Energy Information Administration (EIA) said crude stockpiles across the United States jumped by 4.8 million barrels last week, versus analysts expectations for a draw. The EIA data and a Federal Reserve rate hike supportive to the dollar pushed oil prices down 3 percent on Wednesday. [EIA/S]
"Bearish fundamentals are hanging over the oil markets like storm clouds, with no break in sight or relief in the near future," said Chris Jarvis, founder of Caprock Risk Management, an oil market consultancy in Frederick, Maryland. "The dollar is moving higher too."
The dollar hit a two-week high against a basket of currencies (DXY) on Thursday, making oil and other commodities denominated in the greenback less affordable to users of the euro among others. [USD/]
Speculation about an imminent end to a 40-year ban on U.S. crude exports caused Brent's premium to WTI to dwindle below $1 per barrel. The premium was above $13 a barrel in March
The world's biggest oil producers in OPEC added to the market's bearish sentiment, forecasting scant chance for a meaningful oil price rise in 2016.