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Oil ends down; US crude drops further below $50

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Oil ends down; US crude drops further below $50
A worker stands near the oil refinery in Cienfuegos in this file picture. - Reuters

New York - Brent, the international benchmark for crude, settled down 67 cents, or 1.3 per cent, at $50.79.

By Reuters

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Published: Wed 26 Oct 2016, 10:21 AM

Last updated: Fri 28 Oct 2016, 5:06 PM

Oil settled down on Tuesday, then US crude slid further below $50 a barrel in post-settlement trade after an industry group reported that US oil inventories grew nearly three times as much as forecast.
The American Petroleum Institute (API) reported that US crude stocks rose by 4.8 million barrels in the week ended Oct. 21 versus a 1.7-million barrel build forecast by analysts polled by Reuters.
The US Energy Information Administration (EIA) reports official inventory numbers on Wednesday. Last week, the EIA surprised the market, reporting an unexpected drawdown of 5.2 million barrels for the Oct. 14 week as a storm delayed shipments of imported oil.

* API reports big crude build of 4.8 million barrels
* Oil prices down 2 pct in post-settlement trade
* OPEC adds to worry, jostling over Nov output cuts
"Basically, the glut continues and demand is not coming back," Phil Davis, a trader at PSW Investments in Woodland Park, New Jersey, said, referring to the API data.
"I don't want to read too much into it but the fact of the matter is it certainly doesn't support $50 oil."
Brent, the international benchmark for crude, settled down 67 cents, or 1.3 per cent, at $50.79. In post-settlement trade, it sank as much as $1.24, or 2.4 per cent, to $50.22.
Oil prices were also depressed by producers' verbal jockeying over planned output cuts by the Organisation of the Petroleum Exporting Countries. Iraq, OPEC's second largest producer, reiterated on Wednesday its resistance to contributing to the cuts while data showed it had higher output for October.
Some technical analysts pegged WTI's next support at $49.15, its bottom on Oct. 10 before it rallied to a 15-month high of $51.93 on Oct. 19.
"If we snap that, in very short order we could be back down to $47," said David Thompson, technical analyst and executive vice-president at commodities-focused broker Powerhouse in Washington.
Before this week, oil prices had surged about 13 percent in three weeks since OPEC announced on Sept. 27 its first planned output cut in eight years to combat the steep slump in crude prices from 2014 highs above $100 a barrel.
The production curbs are expected be finalised at OPEC's policy meeting in Vienna on Nov. 30. The group has been holding talks with members and outside producers led by Russia for weeks now to try and sustain the market's interest in its plan.


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