Oil slides to US$58

SINGAPORE – Oil slid to around US$58 a barrel yesterday, taking losses for the week to more than seven per cent and London Brent crude to its lowest this year, on forecasts of a further rise in bulging US fuel stockpiles.

US crude declined 37 cents to US$58,31 by 0634 GMT, taking the market to the weakest level since mid-February after a US$2,35 fall the previous day. London Brent shed 41 cents to US$58,02, after hitting US$57,78, the lowest since December 30 2005.Analysts forecast a draw of 500 000 barrels in US crude stocks last week but a build of 1,5 million barrels in distillate supplies and a gain of 700 000 barrels in gasoline inventories, in government data due later yesterday.”Inventories are huge – sentiment is completely bearish,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.”People were looking at US$100 but that was wrong, so people are liquidating long positions.”Oil prices have plunged from a record US$78,40 in mid-July, under pressure from high US distillate and petrol stocks, slowing growth at the world’s largest economy and dissipating political tensions over Iran’s nuclear programme.If the forecasts hold, distillates will have built for the last eight weeks running, and stocks are already up 15 per cent from a year ago.Petrol stocks are more than nine per cent higher.The brimming US inventories, coupled with the slide in oil prices, prompted Opec President Edmund Daukoru, who is also Nigeria’s top oil official, to urge other members of the producer cartel on Tuesday to make deeper export cuts.Venezuelan Energy and Petroleum Minister Rafael Ramirez told reporters on Tuesday that oil markets were oversupplied by 500 000 barrels per day.But there was no evidence of other Opec members joining Nigerian and Venezuelan moves to trim output.The fading threat of strong hurricanes – such as Katrina and Rita, which pounded crude and refinery production in the US Gulf Coast region last year – added to the bearish tone.Nampa-ReutersLondon Brent shed 41 cents to US$58,02, after hitting US$57,78, the lowest since December 30 2005.Analysts forecast a draw of 500 000 barrels in US crude stocks last week but a build of 1,5 million barrels in distillate supplies and a gain of 700 000 barrels in gasoline inventories, in government data due later yesterday.”Inventories are huge – sentiment is completely bearish,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.”People were looking at US$100 but that was wrong, so people are liquidating long positions.”Oil prices have plunged from a record US$78,40 in mid-July, under pressure from high US distillate and petrol stocks, slowing growth at the world’s largest economy and dissipating political tensions over Iran’s nuclear programme.If the forecasts hold, distillates will have built for the last eight weeks running, and stocks are already up 15 per cent from a year ago.Petrol stocks are more than nine per cent higher.The brimming US inventories, coupled with the slide in oil prices, prompted Opec President Edmund Daukoru, who is also Nigeria’s top oil official, to urge other members of the producer cartel on Tuesday to make deeper export cuts.Venezuelan Energy and Petroleum Minister Rafael Ramirez told reporters on Tuesday that oil markets were oversupplied by 500 000 barrels per day.But there was no evidence of other Opec members joining Nigerian and Venezuelan moves to trim output.The fading threat of strong hurricanes – such as Katrina and Rita, which pounded crude and refinery production in the US Gulf Coast region last year – added to the bearish tone.Nampa-Reuters