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Oil falls as spotlight returns to global glut

The oil and gas sector
The oil and gas sector

Crude oil futures fell, Wednesday, as investor focus shifted back to a deep global supply glut and away from the threat of escalating violence in the Middle East, which pushed prices to two-week highs the previous day.

Brent LCOc1 was down 76 cents at $45.36 a barrel at Wednesday morning, reversing brief gains earlier in the session.

The benchmark had settled up $1.29 at $46.12 on Tuesday, having hit its highest since November 11 at $46.50 after Turkey shot down a Russian fighter jet. It had risen for five consecutive days, its longest run of positive sessions since April.

U.S. West Texas Intermediate (WTI) futures CLc1 fell 61 cents to $42.26 a barrel, having gained $1.12 to $42.87 on Tuesday.

Data from industry group the American Petroleum Institute (API) showed that U.S. crude stocks rose by 2.6 million barrels in the week to November 20, more than double analysts’ expectations for an increase of 1.2 million barrels.

The API data came ahead of figures from the Energy Information Administration, due at Wednesday afternoon and expected to show crude oil stocks rose for a ninth consecutive week.

OPEC is determined to keep pumping oil vigorously despite the resulting financial strain — even on the policy’s chief architect, Saudi Arabia — alarming weaker members who fear that prices may slump further towards $20.

Reuters

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