Oil ends down; U.S. crude drops further below $50 on API data
By Ethan Lou
NEW YORK (Reuters) - Oil settled down on Tuesday, then U.S. crude slid further below $50 a barrel in post-settlement trade after an industry group reported that U.S. oil inventories grew nearly three times as much as forecast.
The American Petroleum Institute (API) reported that U.S. crude stocks rose by 4.8 million barrels in the week ended Oct. 21 versus a 1.7-million barrel build forecast by analysts polled by Reuters. [API/S]
The U.S. Energy Information Administration (EIA) reports official inventory numbers on Wednesday. Last week, the EIA surprised the market, reporting an unexpected drawdown of 5.2 million barrels for the Oct. 14 week as a storm delayed shipments of imported oil. [EIA/S]
"Basically, the glut continues and demand is not coming back," Phil Davis, a trader at PSW Investments in Woodland Park, New Jersey, said, referring to the API data.
"I don't want to read too much into it but the fact of the matter is it certainly doesn't support $50 oil."
U.S. West Texas Intermediate (WTI) crude settled down 56 cents, or 1.1 percent, at $49.96. After the API report, it fell as much as $1.25, or 2.5 percent, to $49.27.
Brent, the international benchmark for crude, settled down 67 cents, or 1.3 percent, at $50.79. In post-settlement trade, it sank as much as $1.24, or 2.4 percent, to $50.22.
Oil prices were also depressed by producers' verbal jockeying over planned output cuts by the Organization of the Petroleum Exporting Countries. Iraq, OPEC's second largest producer, reiterated on Wednesday its resistance to contributing to the cuts while data showed it had higher output for October. Continued...