Oil down 8 percent on gloomy U.S., global demand outlooks

Tue Feb 9, 2016 4:45pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices slid for a fourth straight session on Tuesday and teetered close to 12-1/2-year lows hit last month, after weak demand forecasts from the U.S. government and the western world's energy watchdog, while weak equities also pressured prices.

"The longs got out, the shorts jumped back in and there was possibly a whole lot of hedging by producers today to sell oil at whatever low price they could," said Scott Shelton, broker and commodities specialist with ICAP in Durham, North Carolina.

"It's very difficult for anyone to be positive on this market with the kind of data that's been coming out."

Brent crude oil LCOc1 settled down $2.56, or 7.8 percent, at $30.32 a barrel. It was the largest drop in a day for Brent since Sept. 1.

U.S. crude CLc1 lost $1.75, or 5.9 percent, to finish at $27.94. It fell to $26.19 last week, its lowest since May 2003.

U.S. gasoline RBc1 settled down 6 percent while heating oil HOc1 fell nearly 7 percent.

Prices were under pressure throughout the session, but hit intraday lows after the U.S. Energy Information Administration (EIA) lowered its oil demand growth forecast for the next two years.

Investors do not normally watch the quarterly report so intensely, but the fact that it triggered fresh selling reflected deepening nerves across the crude market.   Continued...

Pump jacks are seen at the Lukoil company owned Imilorskoye oil field, as the sun sets, outside the West Siberian city of Kogalym, Russia, January 25, 2016. REUTERS/Sergei Karpukhin