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.
A Reuters poll of 34 analysts and economists forecast Brent would average $45.44 a barrel in 2016, slightly lower than last month’s forecast of $45.51. [O/POLL]
It was the first downward revision in prices on the poll in six months, and came amid reduced prospects for output curbs by the world’s largest oil producers.
Oil prices rose as much 11 percent in August, posting their biggest monthly rise since April, on speculation the Organization of the Petroleum Exporting Countries and other producers might agree to freezing production during Sept. 26-28 talks in Algeria.
That speculation has since fizzled, although Saudi Foreign Minister Adel al-Jubeir said on Thursday that OPEC and non-OPEC oil producers were moving toward a common position on output.
“Talk is cheap,” Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, told the Reuters Global Oil Forum. “Reality will set in, and the market will realize that the agendas of various OPEC producers are not aligned.”
Additional reporting by Devika Krishna Kumar in New York, Christopher Johnson in LONDON and Keith Wallis in SINGAPORE; Editing by Lisa Von Ahn, David Gregorio and Chris Reese