Oil falls to 3-week low as US crude supplies rise

London - Crude fell to a three-week low as industry data showed US crude stockpiles rose while doubts grew about Russian willingness to cooperate with OPEC in curbing supply.

West Texas Intermediate futures declined as much as 2.1% in New York, while Brent dropped below $50 a barrel for the first time since October 3.

US crude inventories increased by 4.75 million barrels last week, the American Petroleum Institute was said to report.

Analysts surveyed by Bloomberg estimate Energy Information Administration (IEA) data on Wednesday will show that supplies rose. Output cuts are not an option for Russia, the nation’s envoy to OPEC said, according to Interfax.

Oil has fluctuated near $50 a barrel amid uncertainty about whether the Organisation of Petroleum Exporting Countries (OPEC) can implement the first output cuts in eight years and get producers outside the group to join in, notably Russia.

An OPEC committee will meet this week to try to resolve differences over how much individual members should pump, with Iraq saying it should be exempt because of conflict with Islamic militants.

"The mood is really negative," said Phil Flynn, senior market analyst at Price Futures Group in Chicago. "The API report showed a larger-than-anticipated build in crude supplies and there are lingering doubts about OPEC.

The market will remain sensitive to headlines until the OPEC meeting next month."

WTI for December delivery dropped 82 cents, to $49.14 a barrel at 9:18 on the New York Mercantile Exchange. Prices touched $48.93, the lowest since October 4. Total volume traded was 24% below the 100-day average.

US stockpiles

Brent for December settlement slipped 89 cents, to $49.90 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a 76-cent premium to WTI.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, dropped by 2.26 million barrels last week, the API said on Tuesday, according to people familiar with the figures.

Nationwide crude inventories probably increased by 2 million barrels, according to the median estimate in a Bloomberg survey before the EIA report.

Oil-market news:

OPEC Secretary-General Mohammed Barkindo said the 14-nation group is facing its toughest challenge as members debate oil-production cuts needed to balance the market.

He will visit Iraq on Wednesday and Kuwait and the United Arab Emirates in early November.

There’s still a chance that Iraq can resolve a dispute with OPEC over the level of its current output, Iraq’s Prime Minister Haider Al-Abadi said at a press conference in Baghdad.

China crude oil stockpiles rose 2.5% to 30.91 million tons last month, the highest level since March, according to Bloomberg calculations.