Oil set for sixth straight
day of declines
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[November 04, 2016]
By Julia Payne
LONDON
(Reuters) - Oil prices were on course for their sixth straight day of
falls on Friday, dragged lower by a surge in U.S. crude inventories,
timid demand and doubts over the ability of producers to coordinate
output cuts.
Brent crude futures <LCOc1> were at $46.18 per barrel at 0656 ET, down
17 cents from their last close. U.S. West Texas Intermediate (WTI)
futures <CLc1> were down 2 cents at $44.65 a barrel.
The dips put crude on the longest losing run since June and, before
that, since January, with Brent shedding almost 14 percent since its
recent peak in mid-October.
"There has been a very strong retreat and technically, prices are
starting to reach oversold levels," Olivier Jakob of consultancy
Petromatrix said.
Analysts said markets were also weighed down by traders pulling out
money from futures ahead of the U.S. presidential election, which is
seen as a risk to markets.
Global share prices fell to their lowest levels since early July on
Friday on uncertainty over the election outcome.
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"Investors will look at U.S. non-farm payrolls later in the day but I
think there will be a pause for a few days ahead of the U.S. elections,"
Jakob said.
Beyond election concerns, traders said fundamentals were weak, with U.S.
crude stocks surging, demand growth low, and doubts that the
Organization of the Petroleum Exporting Countries and non-OPEC producer
Russia can agree on a meaningful output cut this month.
North Sea crude exports are also set to rise significantly in December,
adding to a surplus of light, sweet grades in the market. The sudden
outage of some 200,000 barrels per day of alternative light Nigerian
crude on Wednesday garnered only mild attention.
While oil production remains near records and inventories are high,
British bank Barclays said demand growth was timid.
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An oil well pump jack is seen at an oil field supply yard near
Denver, Colorado, U.S., February 2, 2015. REUTERS/Rick Wilking/File
Photo
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Demand growth over July-September was less than a third that of the
year-ago quarter, Barclays said in a note, estimating last quarter's
growth below 1 million barrels per day (bpd).
The consumption rise for the last quarter will not be much higher,
before averaging 1.3 million bpd in 2017, it added.
In the United States, crude oil stockpiles soared more than 14 million
barrels last week, the largest build on record, highlighting that a
global fuel supply overhang is far from over.
Also in the United States, the Colonial Pipeline carrying gasoline,
which was disrupted this week by an explosion, is expected to restart
Line 1 on Sunday afternoon.
(Reporting by Julia Payne; Editing by Dale Hudson)
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