Oil futures fell a third straight day on Wednesday, with Brent crude tumbling to a six-week low, as expected Saudi Arabian efforts to lower prices and a post-storm surge in U.S. crude inventories kept the pressure on prices.
Already under pressure, crude prices fell more after the Energy Information Administration's (EIA) weekly inventory report showed U.S. crude stocks jumped 8.5 million barrels - far more than expected.
A senior Gulf source said on Tuesday that Saudi Arabia is working to lower oil prices and is producing around 10 million barrels per day, putting additional pressure on oil prices.
Ali al-Naimi, Saudi Arabia's oil minister, had said on Sept. 10 that OPEC's top exporter was worried about high oil price and would take steps to moderate them.
"People are thinking that maybe the Saudis are going to produce more, and some funds are taking the opportunity to liquidate positions," said Christopher Bellew at Jefferies Bache.
Brent prices faltered above $117 per barrel, and U.S. crude above $100 a barrel, after rallying last week, first on the expectations the U.S. Federal Reserve would act to bolster the economy, and subsequently on the Fed's stimulus launch on Thursday.
Brent November crude fell $3.48 to $108.55 a barrel by 12:52 p.m. EDT (1652 GMT), down 7.1 percent for the week. The $108.30 session low was the lowest since prices touched $107.90 intraday on Aug. 6.
Brent's retreat sent prices below the 200-day moving average of $111.87 and the 50-day moving average of $110.83, triggering more selling, traders and analysts said.
U.S. October crude was down $3.12 at $92.17 a barrel, down 6.5 percent for the week and having moved below $93.08, the 50-day moving average.
The U.S. crude session low of $91.90 was the lowest since prices hit $91.71 on Aug. 10. The front-month U.S. October contract expires on Thursday.
U.S. November crude was down $3.12 at $92.50.
Crude prices got a brief boost on Wednesday when Japan followed the U.S. Federal Reserve's stimulus with its own decision to ease monetary policy by boosting its asset purchases in the face of a slowing global economy.
Oil industry sources said concerns about debt-laden Spain's finances and the possibility of Spain requesting a bailout pulled oil back after the boost from the Bank of Japan's actions. (Additional reporting by Simon Falush in London and Luke Pachymuthu in Singapore; Editing by Marguerita Choy)