Petroleum prices slumped to two-week lows on Thursday as global stock markets fell, as a report, showing U.S. crude inventories rising more than expected, weighed on investor sentiment.
Figures released Thursday by the U.S. Energy Information Administration revealed crude inventories climbed by six million barrels in the week leading up to Oct. 5, compared with analyst expectations for an increase of 2.6 million barrels.
Brent crude fell $1.55, or 1.9%, to $81.54 U.S. a barrel late Thursday morning, off the session low of $81.14, its weakest since Sept. 26. Brent had lost 2.2% on Wednesday. On Oct. 3, it hit a four-year high of $86.74 U.S.
U.S. light crude dropped $1.42, or 1.9%, to $71.75 U.S. after hitting a low of $71.63. The contract lost 2.4% in the previous session.
The monthly report from the Organization of the Petroleum Exporting Countries showed the 15-nation producer group's output rose by 132,000 bpd in September to nearly 32.8 million bpd. Production hikes by Saudi Arabia and Libya offset a sharp output decline in Iran, according to independent figures from several sources.
What is more, Oil prices hit 2-week lows Oil prices hit 2-week lows
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Oil prices slumped to two-week lows on Thursday as global stock markets fell, with investor sentiment made more bearish by a report showing U.S. crude inventories rising more than expected.
Crude inventories climbed by 6 million barrels in the week to Oct. 5, the U.S. Energy Information Administration reported, compared with analyst expectations for an increase of 2.6 million barrels.
Brent crude fell $1.55, or 1.9 percent, to $81.54 a barrel by 10:53 a.m. ET (1453 GMT), off the session low of $81.14, its weakest since Sept. 26. Brent lost 2.2 percent on Wednesday. On Oct. 3, it hit a four-year high of $86.74.
U.S. light crude dropped $1.42, or 1.9 percent, to $71.75 after hitting a low of $71.63. The contract lost 2.4 percent in the previous session.
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"Oil bulls are bearing the brunt of another bruising session as yesterday's selling frenzy intensifies," said Stephen Brennock, analyst at London brokerage PVM Oil. "At the heart of the price malaise are concerns that oil demand will be adversely impacted by a myriad of downside risks facing the global economy."
Stock markets in Asia plunged to a 19-month low on Thursday after Wall Street's worst losses in eight months led to broader risk aversion, a rise in market volatility gauges and concerns over overvalued stock markets in an environment of rapidly rising dollar yields.
"The clear risk-off mode that we are seeing across all markets is also hitting oil," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
OPEC cut its forecast of global demand growth for oil next year for a third straight month on Thursday, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.
In the U.S. Gulf of Mexico, producers have cut daily oil production by roughly 42% due to Hurricane Michael, the Bureau of Safety and Environmental Enforcement said. The cuts represent 718,877 barrels per day (bpd) of oil production.
