Oil ends down but off lows, then slides on API report

Tue Nov 1, 2016 5:42pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices settled lower on Tuesday, then tumbled again after hours following a trade group's report of a U.S. crude inventory build nine times larger than forecast.

During regular trading hours, crude prices hit one-month lows before paring losses at settlement. Then the American Petroleum Institute (API) said crude stockpiles swelled 9.3 million barrels in the week to Oct. 28. Analysts polled by Reuters had forecast a build of 1 million barrels.

API's report came ahead of official inventory data by the U.S. government's Energy Information Administration (EIA), which is considered more reliable.

The API bases its numbers on voluntary reporting by members, while the EIA uses a bigger sample. If the government data confirms the large build, traders said crude prices could plummet.

U.S. West Texas Intermediate (WTI) crude CLc1 settled down 19 cents at $46.67. During the session, it fell as low as $46.20, its lowest since Sept. 28. After the API report, it fell to $46.27.

Brent crude LCOc1 hit a one-month low at $47.72 before settling down 47 cents at $48.14. In post-settlement trade, it fell to $47.86.

"We'll easily be looking at $45 WTI if the EIA report shows a build as terrifying as this," said Phil Davis, crude oil trader at PSW Investments in Woodland Park, New Jersey.

The last time WTI traded at around $45 or below was on Sept. 27, before the Organization of the Petroleum Exporting Countries announced its first planned production cut in eight years to reduce a global oil glut.   Continued...

A view of an oil refinery off the coast of Singapore, March 14, 2008. REUTERS/Vivek Prakash/File Photo