Oil dropped for a second day before weekly government data forecast to show U.S. crude stockpiles expanded further from a record, exacerbating a global glut.

Futures decreased as much as 1.2 percent in New York after slumping 6 percent Monday, erasing last week’s gain. Inventories probably rose by 3.75 million barrels through Jan. 29, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Royal Dutch Shell Plc had its debt rating cut to the lowest since Standard & Poor’s began coverage in 1990, and downgrades of other European producers may follow in coming weeks.

Oil slid 9.2 percent last month amid volatility in global markets, brimming U.S. crude supplies and the outlook for increased exports from Iran after the removal of international sanctions. Crude production from the Organization of Petroleum Exporting Countries increased to a record in January as Indonesia’s membership to the group was reactivated.

West Texas Intermediate for March delivery fell as much as 37 cents to $31.25 a barrel on the New York Mercantile Exchange and was at $31.33 at 8:23 a.m. Hong Kong time. The contract slid $2 to $31.62 on Monday. The volume of all futures traded was about 53 percent below the 100-day average. Prices rose 4.4 percent last week.

Brent for April settlement lost $1.75, or 4.9 percent, to $34.24 a barrel on the London-based ICE Futures Europe exchange on Monday. The European benchmark crude ended the session at a premium of 88 cents to WTI for April.

Source : Bloomberg