Oil continues to slide, with Brent at lowest in over four years
2014-11-05 11:54:20
Crude-oil futures extended losses in Asian trade Wednesday, with the U.S. oil benchmark at its lowest in more than three years and Brent at its lowest in over four years.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $76.81 a barrel, down $0.38 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.60 to $82.22 a barrel. Crude oil finished at a 3-year low on Tuesday.
A steady stream of weak economic data from Europe is weighing on Brent crude oil prices, pushing it lower along with the drop in U.S. oil prices, analyst Tim Evans at Citi Futures said.
“The downward revision in the eurozone macroeconomic outlook and the further decline in prices were both more of a confirmation that a bearish trend remains than any stunning new development,” he said.
Mr. Evans said a psychological limit of $80 a barrel may help limit the drop in Brent crude prices.
Financial markets are looking to Thursday’s European Central Bank meeting for a boost. Meanwhile, oil markets are still pressured by a strong U.S. dollar, weak demand projections and oversupply concerns.
“Yesterday’s support levels were shattered likely due to markets anticipating further cuts from other OPEC countries,” analyst Daniel Ang at Phillip Futures said. He pegged support for Brent crude at $82 a barrel and that for WTI at $75.84 a barrel. Read: Meet the players helping drive oil to new lows
Awash in supply: Late Tuesday, the American Petroleum Institute published data showing weekly U.S. crude stockpiles fell by 640,000 barrels for the week ended Oct. 31. The more closely watched inventory data from the U.S. Energy Information Administration is due later Wednesday and analysts expect an increase of 2.2 million barrels.
The U.S. is awash with locally produced crude oil that it can’t fully process and consume, driving prices lower.
BHP Billiton said Tuesday that it had signed an agreement to sell 650,000 barrels of oil, valued around $50 million, from Texas to foreign buyers without formal government approval.
Nymex reformulated gasoline blendstock for December –the benchmark gasoline contract–fell 119 points to $2.0661 a gallon, while December diesel traded at $2.4305, 122 points lower.
ICE gasoil for November changed hands at $724.50 a metric ton, down $1.75 from Tuesday’s settlement.