Oil down almost 10 percent in two days as hunt for bottom continues

Tue Jan 6, 2015 5:18pm EST
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By Barani Krishnan and Samantha Sunne

NEW YORK (Reuters) - Global oil markets on Tuesday slumped for a fourth straight session as mounting worries about a supply glut pressured crude prices, which have fallen almost 10 percent this week to their lowest since spring 2009.

Traders said the trend for crude seemed lower but that prices could bounce up whenever there is a break in market sentiment. One such moment occurred on Tuesday when weaker-than-expected U.S. economic data briefly pushed the dollar lower. This brought crude off session lows but only for an about an hour, as the downward path resumed.

Refined products such as gasoline RBc1 and heating oil HOc1 also bounced up briefly in morning trade, rallying as investors took profits on short positions. But products later succumbed to the trend, and gasoline settled 2 percent down.

Crude oil prices have plunged more than 55 percent since June, when benchmark Brent traded above $115 a barrel and U.S. crude above $107.

In Tuesday's session, Brent LCOc1 settled down $2.01 at $51.10 a barrel. It earlier fell to $50.52, its lowest since May 2009, and less than a dollar away from breaking below the $50 support.

In the first two days of this week, Brent has dropped $5.32, or almost 10 percent.

U.S. crude CLc1 finished down $2.11, or 4.2 percent, at $47.93, after plumbing an April 2009 low of $47.55.

Brent and U.S. crude extended losses in post-settlement trade after the American Petroleum Institute, an industry group, reported builds in gasoline and distillate stocks last week despite a 4 million-barrel drop in crude stocks. [API/S].   Continued...

An offshore oil platform is seen in Huntington Beach, California September 28, 2014.  REUTERS/Lucy Nicholson