NEW YORK, Aug 19 (Reuters) - U.S. crude oil slumped over 4 percent on Wednesday to hit a 6-1/2-year low and almost break below $40 per barrel, as a huge unexpected stockpile build in the United States reinforced concerns about a growing global oil glut.
U.S. crude inventories rose 2.6 million barrels last week to 456.21 million barrels, the government's Energy Information Administration said.
The figures stunned energy market analysts on Wall Street, as well as traders and investors who had been expecting a stockpile drawdown despite the peak U.S. summer driving season nearing its end and refinery problems cutting fuel processing capabilities.
Late Tuesday, the American Petroleum Institute, an industry group, forecast a 2.3 million-barrel drawdown for the week to Aug. 14. A Reuters poll of analysts had predicted an 800,000-barrel decline.
"The numbers were a total surprise with crude showing a build when the whole Street was forecasting a draw," Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York, said.
The front-month futures contract in U.S. crude, which expires on Thursday, settled down $1.82, or 4.3 percent, at $40.80 a barrel. It dropped as low as $40.46 during the session, its lowest since March 2009.
"If oil is to fall to $40 a barrel, there is nothing to suggest it won't fall even further," Fawad Razaqzada, a London-based technical analyst for crude on forex.com, said, predicting 2003 lows of below $30 if the slide did not stop.
View Full Article
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
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.
Most Popular Articles