Oil Down Again to 12-Year Low; $30 Handle Looks More Likely

U.S. government data on Wednesday showed a 10.6 million-barrel surge in gasoline supplies, the biggest weekly build since 1993, rattling investors already concerned by near-record production and massive stockpiles around the world.

Brent settled down 48 cents at $33.75, after sliding to a low of $32.16, a level last seen in April 2004.

U.S. crude West Texas Intermediate (WTI) finished down 70 cents at $33.27, after hitting a low of $32.10, the lowest since late 2003.

Even so, some traders think the oil rout has gone too far, too fast since the start of the year. After a frenetic fall of nearly 6 percent in European trading, crude prices retraced much of those losses in mid-morning trade in New York as those with short positions took profit from the four-day slide.

"I'll say it's oversold on a short-term basis, though I am an oil bear," said Tariq Zahir, who trades mostly longer-dated spreads in WTI for the Long Island, New York-based Tyche Capital Advisors fund.

"There's covering and also some panic buying in an attempt to support WTI at above $32."

King concurred with that. "For sure, a minus 7 percent for oil over two days on just China, and a blowup of the whole macro trade, was not something I was expecting to see in the first two days of the year."


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