Oil Tumbles Anew As Saudi Cuts US Prices, Hikes Others
Nov 3 (Reuters) - Oil tumbled by as much as $2 a barrel in the final minutes of regular trade on Monday, hitting new lows in New York as Saudi Arabia deepened price cuts for U.S. customers even though it hiked prices for the rest of the world.
U.S. crude dove to its lowest since mid-2012, with technical selling swamping the market, helping drive the curve into a contango structure, with short-term prices cheaper than long-dated ones, for the first time since January.
A rising dollar and concerns about Chinese economic growth set a bearish tone early in the session, but global benchmark Brent crude briefly turned positive after news that Saudi Aramco had hiked their monthly selling prices to Asia and Europe, a signal that some took as a sign of plans for lower output.
But Aramco also cut its prices for U.S. customers, a fact that soured market sentiment over the afternoon. The decline accelerated after U.S. prices broke the Oct. 27 intraday low of $79.44 a barrel, traders said.
"The market continues to hunt for a bottom. There is more than ample supply, no producers seem willing to cut back, there are fears Europe could fall into recession and China's growth is continuing to slow," said Gene McMillian, senior analyst at tradition Energy in Stamford, Connecticut.
U.S. crude hit a low of $78.14 per barrel, its lowest since June 2012, before settling down $1.76 at $78.78.
Brent crude fell as low as $84.18 per barrel but settled at $84.78.
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