Oil dropped below $34 a
barrel in New York after U.S. gasoline inventories surged the most in
22 years and crude supplies at the American hub climbed to a record.
Brent oil fell to an
11-year low in London as West Texas Intermediate tumbled to a seven-year
low in New York. Gasoline stockpiles rose 10.6 million barrels last
week, the most since May 1993, government data show. Crude inventories
in Cushing, Oklahoma, the delivery point for WTI, advanced to an
all-time high, while nationwide supplies slid. Adding pressure to oil
was China’s central bank devaluation of the yuan, a reminder of the
August cut that sparked financial-market turmoil.
Oil prices have
shrugged off rising tension between Iran and Saudi Arabia as supplies
continue to outstrip demand. The market also ignored a “cry for help”
from Libya’s National Oil Corp. as Islamic State militants attacked
crude storage tanks in the region of Es Sider, the country’s biggest oil
port. Analysts from Citigroup Inc. to UBS Group AG predict crude may
fall to $30 in the coming months.
West Texas
Intermediate for February delivery declined $2, or 5.6 percent, to
$33.97 a barrel on the New York Mercantile Exchange. It was the lowest
close since December 2008. Total volume traded was 22 percent higher
than the 100-day average at 3 p.m.
Brent for February
settlement fell $2.19, or 6 percent, to $34.23 a barrel on the
London-based ICE Futures Europe exchange. It was the lowest close since
June 2004. The European benchmark crude closed at a 26-cent premium to
New York futures.
Source : Bloomberg
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