Oil slides near $50 on signs US fuel stockpiles increased
Oil prices have struggled to hold above $52 a barrel on concern rising US output may offset OPEC-led supply cuts
Hong Kong: Oil declined to near $50 a barrel as US industry data showed an increase in gasoline stockpiles and a boost in crude inventories at the nation’s biggest storage hub.
Futures lost as much as 1% in New York, after falling 2.4% in the previous two sessions. Gasoline supplies rose by 4.91 million barrels last week, the American Petroleum Institute was said to report. That will be the biggest gain since January if replicated in government data Wednesday. Libya is gradually resuming output at its biggest oil field, people familiar with the matter said.
While last month’s rally sent oil into a bull market amid stronger demand prospects, prices have struggled to hold above $52 a barrel on concern rising US output may offset Organization of Petroleum Exporting Countries (OPEC) led supply cuts. Members of the OPEC and its allies need to extend the deal past March for at least three months to support prices, according to UBS Group AG.
“After the steep rally of recent weeks, it seems quite logical that the market runs into some resistance, triggering waves of profit-taking,” said Hans van Cleef, senior energy economist at ABN Amro Bank NV in Amsterdam.
West Texas Intermediate for November delivery slid as much as 51 cents to $49.91 a barrel on the New York Mercantile Exchange, and was at $50.08 at 9:55am in London. Total volume traded was about 31% below the 100-day average. Prices fell 16 cents to $50.42 on Tuesday.
Brent for December settlement dropped 48 cents, or 0.9%, to $55.52 a barrel on the London-based ICE Futures Europe exchange. Prices lost 12 cents to $56 on Tuesday. The global benchmark crude traded at a premium of $5.15 to December WTI.
Nationwide crude stockpiles fell by 4.08 million barrels last week, the API said Tuesday, according to people familiar with the data. Crude stockpiles at Cushing, Oklahoma, climbed by 2.08 million barrels. An Energy Information Administration report Wednesday is forecast to show supplies slid by 500,000 barrels, according to the median estimate in a Bloomberg survey. Bloomberg
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