Oil Crashes After 4-Day Rally; US Inventory Renews Glut Worry
NEW YORK, Feb 4 (Reuters) - Oil prices crashed on Wednesday, with U.S. crude losing 9 percent in one of its biggest daily routs ever, as record high oil inventories in the United States cut short a four-day rally.
The abrupt turn, coming after a 19 percent price gain between Thursday and Tuesday, also raised questions on whether the market had found a bottom to the selloff that began last summer and is now in its eighth month.
Selling began early in the day after a rebound in the dollar hurt demand for oil from those holding currencies such as the euro. The slide accelerated midmorning, after the U.S. government reported a huge weekly build in crude supplies, and showed its full force in the final hour.
Benchmark Brent oil fell below the key $55 a barrel mark, after soaring to a one-month high of $59 just a day ago. U.S. crude broke below $48, after Tuesday's peak above $54.
"Hereon, I've no illusions that we'll be going further and further down until something fundamentally changes," said Tariq Zahir, portfolio manager at Tyche Capital Advisors, an investment fund in Laurel Hollow in New York.
"I'm sticking to my shorts and selling into any strength I see until we get rid of 1.5 million to 2 million barrels of oil a day from this market," he said.
U.S. crude stocks jumped by 6.3 million barrels last week to 413.06 million, their highest since records began in 1982, the government-run Energy Information Administration reported on Wednesday. Traders and investors had expected a build of just about 3.5 million barrels for the week ended Jan. 30.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.