Oil prices extend losses on glut worries

New York, Aug 3 (IANS) Oil prices reversed early gains to end lower on Tuesday, with the US oil settling below $40 a barrel for the first time since April, as concerns about a supply glut continued to weigh on the market.

US oil initially rose more than two per cent in the early trading on Tuesday as the dollar index hit a multi-week low, but slid to the red territory on persistent worries about a global supply glut, Xinhua news agency reported.

Traders expect the Energy Information Administration (EIA) to report on Wednesday that US crude inventories fell 1.4 million barrels last week after a surprise build for the previous week that broke a nine-week drawdown.

However, US crude stockpiles will remain at the highest season level in at least two decades.

The West Texas Intermediate for September delivery dipped $0.55 to settle at $39.51 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery decreased $0.34 to close at $41.80 a barrel on the London ICE Futures Exchange.