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Oil tumbles on glut worry; biggest weekly drop since January looms

Oil&Gas Materials 1 September 2016 23:04 (UTC +04:00)
Energy monitoring service Genscape's report of a 714,282-barrel drawdown at the Cushing, Oklahoma, delivery point for US crude futures during the week ended on Aug. 30 did little to bolster sentiment, traders said who saw the report said
Oil tumbles on glut worry; biggest weekly drop since January looms

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

Investors focused instead on Wednesday's government data showing a 2.3 million-barrel build in US 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 US Energy Information Administration showed.

Brent crude futures were down $1.29, or 2.8 percent, at $45.60 a barrel by 1:02 p.m. EDT (1702 GMT).
US crude's West Texas Intermediate (WTI) futures fell $1.28, or 2.9 percent, to $43.42 a barrel.

Both Brent and WTI were down nearly 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 US 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 that 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.

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