Oil down again to 12-year low; $30 handle looks more likely
By Barani Krishnan and Simon Falush
NEW YORK/LONDON (Reuters) - Oil prices fell for a fourth day on Thursday, lurching again to 12-year lows as new financial market tumult in China brought a $30 per barrel handle within view.
Oil has fallen every day this year, losing nearly 10 percent in a sudden dive that makes last year's Goldman Sachs warning of sub-$30 crude seem not so outlandish after all.
"Can we go down another $3 a barrel? In percent terms, that's another 10 percent and could happen in a matter of one or two days of trading," said Greg Sharenow, executive vice-president overseeing a $16 billion commodities portfolio for the Pacific Investment Management Company in Newport Beach, California.
Global oil benchmark Brent and U.S. crude futures fell to nearly $32 a barrel on Thursday, their lowest since at least 2004, after another free fall in the Chinese stock market rattled investors already concerned by the world glut in oil.
Although oil prices later bounced off the day's lows as some bearish traders took profits on short positions, few dealers were willing to call an end to the 18-month slump.
"I wouldn't say it's a given right now that we will break below $30, but I think before the first quarter we will," said Doug King, fund manager in London for the $220 million Singapore-based Merchant Commodity Fund.
"And the reason for that is you're not stopping enough production where it needs to be shut, like in the U.S."
U.S. government data on Wednesday showed a 10.6 million-barrel surge in gasoline supplies, the biggest weekly build since 1993, rattling investors already concerned by near-record production and massive stockpiles around the world. Continued...