Oil drops to 3-month low, U.S. erases all gains since OPEC output cut

Tue Mar 14, 2017 7:23pm EDT
 
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By Scott DiSavino

NEW YORK (Reuters) - Oil tumbled on Tuesday after OPEC reported a rise in global crude stocks and a surprise output jump from its biggest member, Saudi Arabia, further pressuring prices that have now erased nearly all gains since OPEC announced output cuts in November.

Even though OPEC made an upward revision to its global demand outlook, signs of even modestly higher Saudi output flustered investors.

U.S. crude fell to its lowest settlement since Nov. 29, the day before the Saudi kingdom led the Organization of the Petroleum Exporting Countries (OPEC) to cut supplies. Brent settled at its lowest since Nov. 30.

Brent LCOc1 futures dropped below their 200-day moving average for the first time since late November during the session. Brent settled down 43 cents, or 0.8 percent, at $50.92 a barrel.

U.S. West Texas Intermediate crude CLc1 lost 68 cents, or 1.4 percent, to settle at $47.72 per barrel for the seventh daily decline in a row, the longest losing streak since January 2016. It is down almost 11 percent since March 3.

On technical charts, Brent and WTI both remained in oversold territory for a fifth day in a row, their longest such streaks since November.

The Brent front-month premium over the corresponding U.S. contract WTCLc1-LCOc1 rose to its highest since late January.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.   Continued...

 
FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014.  REUTERS/Todd Korol/File Photo