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By Bloomberg

Oil resumed its decline before U.S. government data forecast to show crude inventories expanded for a second week in the world’s biggest consumer of the fuel.

Futures fell as much as 1.2 percent in New York. Supplies probably increased by 850,000 barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. A gain will keep stockpiles about 100 million barrels above the five-year average. Crude producers such as BP Plc have started a new round of cost cutting amid lower prices.

Oil is heading for the biggest monthly decline this year on signs the global glut will persist as the U.S. pumps near the fastest rate in three decades and leading members of the Organization of Petroleum Exporting Countries produce at a record. The Bloomberg Commodity Index, which includes crude, remained near a 13-year low on concern over China’s economic growth.

“The crude oil bears appear to be back in full force,” Hamza Khan, commodity strategist at ING Bank NV in Amsterdam, said in a report. “The usual fears are at play” including “rebounding U.S. shale production.”

West Texas Intermediate for September delivery slid as much as 59 cents to $47.39 a barrel in electronic trading on the New York Mercantile Exchange and was at $47.76 at 11:40 a.m. London time. The contract gained 59 cents to $47.98 on Tuesday. The volume of all futures traded was about 36 percent below the 100- day average. Prices have lost more than 20 percent from their closing peak this year on June 10.

U.S. Supplies

Brent for September settlement fell as much as 79 cents, or 1.5 percent, to $52.51 a barrel on the London-based ICE Futures Europe exchange. It dropped 17 cents to $53.30 on Tuesday, the lowest close since Jan. 30. The European benchmark crude was at a premium of $5.34 to WTI.

Stockpiles in the U.S. unexpectedly rose through July 17 to 463.9 million barrels, according to the EIA. The nation pumped 9.56 million barrels a day during the same period, compared with 9.61 million a day in early June, the highest level in weekly data since January 1983.

Lower prices are continuing to affect oil producers. BP said Tuesday it will spend less than $20 billion this year, having said three months ago it would exceed that figure, while Chevron Corp. said it’s eliminating 1,500 jobs to curb spending by about $1 billion.

The Bloomberg Commodity Index of 22 raw materials, including crude, is heading for the biggest monthly drop since September 2011 amid concern slower economic growth in China will crimp demand.

“There’s ample supply in the market,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “There’s enough support to keep prices from tumbling, but if confidence continues to wane, then we could see oil drift lower.”