Investing.com - West Texas Intermediate oil futures held near the lowest level in more than six years on Wednesday, as market participants looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
Crude oil for delivery in October on the New York Mercantile Exchange declined 10 cents, or 0.22%, to trade at $43.03 a barrel during European morning hours.
A day earlier, New York-traded oil futures hit $41.43, the weakest level since March 2009, before rallying to end at $43.12, up 71 cents, or 1.67%.
Wednesday's government report was expected to show that U.S. crude oil stockpiles fell by 0.8 million barrels last week, while gasoline stockpiles were forecast to decline by 1.6 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 2.3 million barrels in the week ended August 14, compared to expectations for a decline of 2.0 million.
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 tacked on 3 cents, or 0.06%, to trade at $48.84 a barrel.
On Tuesday, London-traded Brent prices fell to $48.25, the lowest level since January 14, before closing at $48.81, up 7 cents, or 0.14%.
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 $5.81 a barrel, compared to $5.69 by close of trade on Tuesday.
In China, the Shanghai Composite took investors on another volatile ride on Wednesday, tumbling by as much as 5% after the open, before paring losses after the midday break to end up 1.3% as Beijing’s massive stock-rescue operation kicked into gear.
Chinese stock markets dropped 6% a day earlier amid growing concerns over the health of the Asian nation's 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.