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Oil hits four-month low on US supply glut

AFP | Last Updated: Wednesday, November 6, 2013 - 09:34

London: Crude oil prices struck a four-month low on Wednesday on fears of a growing stockpiles glut in top consumer the United States, and as dealers also eyed the rebounding dollar.

New York's main contract West Texas Intermediate (WTI) for delivery in December sank to USD 93.41 per barrel -- which was the lowest level since June 24. It later stood at USD 93.66, down 96 cents from yesterday's close.

Brent North Sea crude for December dipped 35 cents to USD 105.88 a barrel in late afternoon trade.

Analyst Fawad Razaqzada, at trading firm GFT, said that the market was hit by "ongoing concerns over rising US crude inventories and (the) weaker global demand outlook".

He added: "Underscoring the demand worries, the European Commission on Wednesday cut its 2014 forecast for economic growth in the eurozone and raised its estimate for unemployment."

In addition, a better-than-expected reading on the US services industry pushed the dollar higher, in turn weighing on oil prices.

A rising greenback makes dollar-denominated oil more expensive for buyers using cheaper currencies.

Later on Wednesday, meanwhile, industry body the American Petroleum Institute will publish its weekly oil inventory data.

And tomorrow, the US government's Energy Information Administration will issue its official snapshot of crude reserves for the week ending November 1.

Crude inventories in the United States have climbed for the past six weeks, to about 28 million barrels, raising concerns about oversupply in the world's largest economy and top crude consumer.

WTI is trading below the USD 95 threshold after falling for four consecutive sessions last week under pressure from the build up in crude stockpiles, before rising slightly on Monday.

Libyan oil production levels also remain in focus, analysts said.

First Published: Wednesday, November 6, 2013 - 09:34
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