Oil prices fell about 3 per cent yesterday on concerns that a six-week market recovery has gone beyond fundamentals as US crude stockpiles continue to build and Iran maintains little interest in joining major producers in freezing production.

Crude inventories across the US are likely to have hit record highs for a fifth straight week last week, rising 3.3 million barrels, a poll of analysts said.

The Organisation of the Petroleum Exporting Countries (OPEC), meanwhile, said global demand for crude from its members, including Saudi Arabia and Iran, will be less than previously thought this year due to competing non-OPEC supply.

US crude futures settled down $1.32, or 3.4 per cent, at $37.18 a barrel, while Brent finished down 86 cents, or 2 per cent, at $39.53.

The price slide came after last week’s rally of 7 per cent in US crude, which was up for a fourth straight week.

Reuters