Oil prices resumed their slide on Wednesday, dragged down after an unexpected gain in U.S. inventories, but with losses capped by a recovery in global equities on hopes of a rate cut from the Federal Reserve. U.S. crude inventories rose unexpectedly last week, while gasoline and distillate stockpiles built more than expected, data from American Petroleum Institute showed on Tuesday. Crude stocks rose by 3.5 million barrels in the week to May 31 to 478 million barrels, compared with analysts' expectations for a decrease of 849,000 barrels. Click Read More below for additional information.
Oil investors turned bearish at the fastest pace in more than a year as they lost confidence that OPEC will reach a deal with other producers to limit supply at a gathering this week in Algiers.
Money managers increased bets on falling prices by half as the Organization of Petroleum Exporting Countries kept pumping at a record rate before the meeting. Prices rose as high as $47.62 a barrel this month as OPEC officials conducted meetings from Vienna to Paris to Moscow in attempts to reach consensus. Oil tumbled on Sept. 23 after Saudi Arabia was said to dismiss prospects for an output agreement.
“The rhetoric around the meeting is ringing hollow,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund focused on energy. “What they say and do are completely different since they continue to increase production.”
WTI futures declined 3.3 percent to $43.44 a barrel in the report week. Crude was trading at $44.94, up 1 percent, as of 12:04 p.m. London time on Monday.
More than 800,000 barrels a day of additional crude is pouring into the global market this month as Russian output climbs while Libya and Nigeria restore disrupted supplies, according to their ministry officials. The global oil-market surplus, once projected to wind down this year, will drag into late 2017, the International Energy Agency said on Sept. 13.
more at: http://www.bloomberg.com/news/articles/2016-09-25/oil-speculators-abandon-hope-in-opec-s-ability-to-support-prices