Oil Near 2-Month Low as US Stockpiles Expand
(Bloomberg) -- Oil held near the lowest level in almost two months as American crude inventories expanded the most since May and disappointing U.S. economic data added to pessimism over the demand outlook.
Futures in New York were steady after closing down 1.8% on Wednesday. U.S inventories swelled by a more-than-expected 3.1 million barrels last week, according to Energy Information Administration data. American private payrolls for September fell short of estimates, a day after a manufacturing gauge slumped to the lowest in a decade, spurring drops in financial markets.
Crude fell for seven straight days through Wednesday -- the longest losing streak in almost a year -- on increasing signs the U.S.-China trade war is pushing the global economy toward recession. Saudi Arabia’s speedy recovery from the Sept. 14 attacks as well as an easing of tension in the Persian Gulf has also undermined prices.
“What’s impossible to ignore are the economic realities being signaled in the latest run of economic data,” said Stephen Innes, an Asia-Pacific market strategist at AxiTrader Ltd. The U.S. inventories report exacerbated the price slide, he said.
West Texas Intermediate for November delivery fell 7 cents to $52.57 a barrel on the New York Mercantile Exchange as of 7:29 a.m. in London. It lost 10% in the seven trading sessions through Wednesday.
Brent for December settlement declined 15 cents, or 0.3%, to $57.54 a barrel on the ICE Futures Europe Exchange after tumbling 2% on Wednesday. The global benchmark crude traded at a $5.06 premium to WTI for the same month.
U.S. crude inventories increased for a third week to about 423 million barrels in the week through Sept. 27, the EIA data showed Wednesday. That was more than the median estimate for a 2 million-barrel-gain in a Bloomberg survey. American Petroleum Institute figures released earlier had indicated a 5.9 million barrel decline.
The August gain in U.S. payrolls was also revised lower, the ADP Research Institute said, suggesting a manufacturing recession. Meanwhile, the White House imposed tariffs on European exports including civil aircraft and dairy products, raising concern that another trade-war front is being opened and weighing on financial markets.
--With assistance from Carlos Caminada.
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