LONDON - Oil edged lower on Monday on a global supply glut pushing fuel storage sites close to capacity, and with fewer speculators betting on a rise in crude prices.
Brent, the international benchmark, was down 45 cents at $47.54 a barrel at 1400 GMT, 12 percent below this month's high.
U.S. crude futures traded down 63 cents at $43.97 a barrel, the lowest in nearly four weeks.
As refined oil product storage tanks fill up, unwanted diesel and jet fuel (distillate) cargoes are backing up outside Europe's ports and taking longer, slower routes around the southern tip of Africa to buy time.
Research consultancy Energy Aspects said product stocks rose by 0.6 million barrels per day in the third quarter.
"While our distillate balances suggest that stocks will fall short of capacity, the margins of error are small and the risks high, leaving risks to current crude oil prices and timespreads as skewed to the downside through next spring," analysts at Goldman Sachs wrote on Monday.
The bearish outlook led more speculators to sell out of long positions on crude oil, with holdings slipping by 18,597 contracts last week to 184,939 lots, InterContinental Exchange data showed.
Due to low oil prices, investment in the sector in 2016 is likely to decline further after sliding this year by more than a fifth, Fatih Birol, executive director of the International Energy Agency (IEA), said on Monday.
"If it comes true, this will be the first time in two decades we will see oil investments declining for two consecutive years and may be an indication for future oil markets," he said at Singapore International Energy Week.
Investors also await the outcome of this week's two-day policy meeting of the U.S. Federal Reserve, just days after China's surprise fourth interest rate cut this year.
The United Arab Emirates oil minister said on Monday he expected an upward correction in oil prices next year as demand is set to recover more quickly than expected.
Suhail bin Mohammed al-Mazroui said OPEC, of which the UAE is a member, had agreed to continue following a market-driven strategy, meaning demand and supply, rather than intervention, would decide price levels.