Oil tumbles; large gasoline build trumps U.S crude draw
By Barani Krishnan
NEW YORK (Reuters) - Global oil markets tumbled on Wednesday, with U.S. crude futures settling down 4 percent after bullish impact from lower crude inventories was offset by large gasoline builds that raised concerns about high autumn fuel supplies.
Also weighing on crude were Colonial Pipeline's efforts to fix an outage on one of its lines that had been supporting prices of gasoline, and the larger oil complex, since Tuesday.
Brent, the global benchmark for oil, LCOc1 settled down $1.33, or 2.7 percent, at $47.75 a barrel.
U.S. crude CLc1 slumped $1.88, or 4.1 percent, to settle at $44.48.
Gasoline RBc1 finished down 2 percent after hitting two-week highs earlier in the day.
Crude prices had initially rallied 2 percent, with Brent briefly peaking above $50, after the U.S. government reported a drawdown of about 2 million barrels for a second week in a row. [EIA/S]
"The crude numbers were not a big surprise in any way," said Tariq Zahir of Tyche Capital Advisors in Laurel Hollow, New York.
"A draw we did see but there was also a bigger-than-expected build in gasoline. The bottom line is we think any rallies, if we do see them, will be short lived and we will sell into them," said Zahir, an oil bear. Continued...