Oil prices tumbled on Tuesday, with Brent crude leading the decline as ample supply in Europe and North America outweighed fears that turmoil in the Middle East and North Africa could disrupt production.
Worries about the prolonged geopolitical tension in key-producing regions had prompted a short rebound in the oil market after the weekend. But in the absence of supply disruptions, the market resumed its downward trend in Tuesday's mid-morning session, as traders and investors grew more nervous about seasonal weak demand and poor refinery margins in a market that appears to be abundantly supplied.
"We continue to see material risk to supply from Libya, Iraq, and Russia, but the market over the past six weeks has become increasingly complacent regarding supplies,'' said Tim Evans, an energy futures specialist at Citi in New York.
Global oil demand has been running below supply over the last few months, building up a glut of high quality crude oil in the West African, European and Asian markets.