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Oil prices decline to nearly 1-month lows on supply glut concerns

Published 26/10/2015, 13:23
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Investing.com - U.S. oil futures declined to nearly one-month lows on Monday, as global glut concerns continued to weigh on the commodity.

U.S. crude futures for December delivery were last at $44.40 a barrel, down 0.45% for the day.On the ICE Futures Exchange in London, the December Brent contract were down 0.51% at $47.83 a barrel.

Oil prices had strengthened after European Central Bank President Mario Draghi signaled last week that further monetary easing is likely later this year.

The comments underlined the diverging monetary policy stance between the Federal Reserve and other central banks. The Fed is currently expected to start hiking interest rates sometime in early 2016.

Investors were looking ahead to Wednesday’s monetary policy announcement by the Fed for fresh indications on the timing of an initial rate hike.

But crude's gains were limited after the People’s Bank of China unexpectedly cut interest rates on Friday in an effort to shore up slowing growth in the world’s second largest economy.

It was the sixth rate cut since last November, reinforcing the divergence in monetary policy between the U.S. and central banks in the rest of the world.

The market was also jittery amid rising inventory levels and as expectations for a mild winter in Europe and North America will likely lead to reduced refinery production and lower use of crude by refiners.

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