Oil slides on glut worry, on track for biggest weekly drop since Jan

Thu Sep 1, 2016 3:17pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices fell more than 3 percent on Thursday, heading for their sharpest weekly slide since January as investors brushed aside talk that OPEC might freeze production and focused on a growing glut from U.S. crude stockpiles.

Energy monitoring service Genscape's report of a 714,282-barrel drawdown at the Cushing, Oklahoma, delivery point for U.S. crude futures during the week ended on Aug. 30 did little to bolster sentiment, traders who saw the report said.

Investors focused instead on Wednesday's government data showing a 2.3 million-barrel build in U.S. crude stocks in the last week, more than double what the market had expected. Inventories of distillates, which include diesel and heating oil, rose nearly 10 times as much as forecast, the data from the U.S. Energy Information Administration showed. [EIA/S]

Brent crude futures ended the session at $45.45 per barrel, down $1.44 or 3.07 percent.

U.S. crude's West Texas Intermediate (WTI) futures closed down $1.54 or 3.45 percent at $43.16 a barrel.

Both Brent and WTI were down about 9 percent week-to-date for their biggest decline since mid-January.

Technical pressure has also increased on oil, with WTI edging toward a test of its Aug. 11 low of $41.10. That low had been a crucial support for U.S. crude futures, which rallied to above $48 less than a week later.

"Basically it's a retest of that breakout," Andreas Wunder at Alphatrade Asset Management in Austin, Texas, said, noting the move lower appeared as forceful as the one higher.   Continued...

Cars wait to fill with fuel at Sinopec's fuel station in Beijing, China, February 3, 2016. REUTERS/Kim Kyung-Hoon