Brent crude prices touched 13-year lows on Wednesday amid concerns that supply growth continues to outpace demand.
Benchmark Brent crude prices fell to a low of $29.80 per barrel on Wednesday before closing at $30.31 per barrel.
The price drop marked the first time since December 2003 that Brent prices have slipped below the $30 per barrel mark, the Wall Street Journal said.
Brent was trading at $30.61 per barrel around 10 a.m. on Thursday while West Texas Intermediate was trading at $30.87 per barrel.
The U.S. Energy Information Administration’s latest short-term energy outlook found that global oil inventories increased by 1.9 million barrels per day in 2015, marking the second consecutive year of inventory builds.
“This oversupply has contributed to oil prices reaching the lowest monthly average level since mid-2004,” the EIA said.
The EIA expects inventories to rise by an additional 0.7 million bpd in 2016, but the agency expects the global oil market to become “relatively balanced” in 2017.
The first draw on global oil inventories in 15 consecutive quarters is now expected in the third quarter of 2017, the report said.
The inventory build dragged average Brent prices down to $52 per barrel in 2015, a $47 per barrel drop from the average 2014 price.
While crude inventories only jumped by 234,000 barrels last week an 8.4 million barrel gasoline inventory build and a 6 million barrel jump in distillates inventories weighed on crude prices, Retuers said.
U.S. crude oil production averaged an estimated 9.4 million barrels per day in 2015 after falling by about 80,000 barrels per day from November to December, according to the EIA.
The agency currently expects U.S. crude production to average 8.7 million bpd in 2016 and 8.5 million bpd in 2017.