Oil falls again as IMF cuts forecast; Iran hints at $25 oil
By Barani Krishnan
NEW YORK (Reuters) - Oil fell as much as 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.
Genscape, an analytics firm that monitors U.S. oil stocks, reported a 2.6 million-barrel build last week in Cushing, Oklahoma, the delivery point for the U.S. crude futures contract, adding to the market's bearish sentiment, traders said.
Trade group American Petroleum Institute will issue its data on U.S. crude inventories for last week on Wednesday while the government's Energy Information Administration will release its stockpile tally on Thursday, both delayed a day by a holiday on Monday.
Benchmark Brent crude LCOc1 closed down 85 cents, or 1.8 percent, at $47.99 a barrel. It earlier touched a session low of $47.78.
U.S. crude CLc1 settled down $2.30, or 4.7 percent, at $46.39 a barrel, after tumbling to an intraday bottom of $45.89. Traders said activity in U.S. crude was heightened somewhat by the expiry of the February futures contract CLG5 as the front-month.
The premium for Brent over U.S. crude futures CL-LCO1=R widened after Genscape's reported build in Cushing stocks. The arbitrage was at around $1.50 a barrel when U.S. crude settled, after reaching $1.66 earlier.
Oil prices are hovering near six-year lows after a selloff on worries of a glut caused primarily by unexpectedly high production of U.S. shale crude.
An expected slide in the U.S. oil rig count in the first quarter compared with the fourth quarter of last year failed to boost sentiment on Tuesday as traders and investors remain focused on concerns of oil oversupply. Continued...