Oil slides 3 percent; hits 2-1/2-mth low on U.S. stockpile, Iraqi supply

Wed Nov 11, 2015 4:01pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices fell about 3 percent on Wednesday, hitting August lows, on worries U.S. crude inventories were piling up and Iraq was bringing on more supply that would intensify OPEC's fight for market share.

U.S. crude stockpiles jumped 6.3 million barrels last week for a seventh week of builds, industry group American Petroleum Institute said on Tuesday, far surpassing the 1 million-barrels forecast by analysts in a Reuters poll. The U.S. Energy Information Administration (EIA) issues official inventory data on Thursday.

Separately, Reuters shipping data showed tankers with nearly 20 million barrels of Iraqi oil due to sail to the United States in November, almost 40 percent above the amount booked to arrive in October. That would be the largest U.S. monthly import of Iraqi oil since mid-2012.

Iraq is OPEC's No. 2 crude producer.

In another sign of oversupply, a traffic jam of about 40 oil tankers has emerged along the U.S. Texas coast.

"You can talk all you want about oil demand being better next year and beyond, but right now we have a heck of a glut on our hands that I think has to be priced in some more," said John Kilduff, partner at New York energy hedge fund Again Capital.

Brent crude LCOc1 settled down $1.63, or 3.4 percent, at $45.81 a barrel. Its session low of $45.62 was the lowest since Aug. 27.

U.S. crude's benchmark West Texas Intermediate (WTI) contract CLc1 settled down $1.28, or 3 percent, at $42.93.   Continued...

Towers at an oil refinery in the southern Sydney suburb of Kurnell are silhouetted against a cloudy sky August 6, 2004.  REUTERS/Tim Wimborne  TBW/LA -