Crude falls, extending two-week slide on refined oil glut worry

Mon Oct 26, 2015 7:51pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Crude prices fell again on Monday, staying under pressure after two straight weeks of losses, on worries that the oversupply in oil products would swell from unseasonably warm weather and the waning maintenance cycle for U.S. refineries.

Influential Wall Street trading house Goldman Sachs warned of downside risk for oil prices through spring 2016 as U.S. and European storage utilization for distillates, which include diesel, neared historic highs.

Traders said that as refined oil product storage tanks filled up, unwanted diesel and jet fuel cargoes were backing up outside Europe's ports and taking longer, slower routes around the southern tip of Africa.

"There's talk in the market about ULSD (ultra low sulfur diesel) storage potentially reaching 'tank tops', and that's weighing on crude," said Dave Thompson of Washington-based broker Powerhouse.

Brent, the global benchmark for crude, settled down 45 cents, or almost 1 percent, at $47.54 a barrel.

U.S. crude closed down 62 cents, or 1.4 percent, at $43.98.

Both crude benchmarks have lost about 10 percent over the past two weeks.

Among refined products, New York's ULSD settled down 2 percent while London's gasoil lost about 1 percent.   Continued...

 
A car is filled with gasoline at a gas station pump in Carlsbad, California August 4, 2015. REUTERS/Mike Blake/Files