Oil prices extend losses on glut worries

Oil prices reversed early gains to end lower Tuesday, with the U.S. oil settling below 40 U.S. dollars a barrel for the first time since April, as concerns about a supply glut continued to weigh on the market.

U.S. oil initially rose more than 2 percent in the early trading Tuesday as the U.S. dollar index hit a multi-week low, but slid to the red territory on persistent worries about a global supply glut.

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

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

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