It’s the worst settle since August 11, with a close of $43.49, CNBC reports.Both Brent and WTI were down more than 8 percent week-to-date for their biggest decline since mid-January.
Energy monitoring service Genscape’s report of a 714,282-barrel drawdown at the Cushing, Oklahoma, delivery point for U.S. crude futures during the week ended on Aug. 30 did little to bolster sentiment, traders said.
Investors focused instead on Wednesday’s government data showing a 2.3 million-barrel build in U.S. crude stocks in the last week, more than double what the market had expected. Inventories of distillates, which include diesel and heating oil, rose nearly 10 times as much as forecast, the data from the U.S. Energy Information Administration showed.
“The high U.S. inventory data suggest oversupply will remain for longer than expected,” said Hans van Cleef, senior energy economist at ABN AMRO Bank N.V. in Amsterdam.
“On top of that, anticipation of a higher dollar if the Fed starts to hike rates is negative for oil prices. And there’s also uncertainty about the likelihood of OPEC/non-OPEC action at the end of the month.”
Oil prices rose as much 11 percent in August, posting their best monthly return since April, on speculation that the Organization of the Petroleum Exporting Countries and other producers might agree on curbing output at Sept. 26-28 talks in Algeria. Russia is also expected to attend the IEF.
But many investors doubt OPEC will be able to agree a common position on production and prices have fallen in recent days. Many past efforts to restrict production have failed and OPEC is responsible for only around 40 percent of world output.
“There is still lots of correction potential, given the overhang of speculative long positions and exaggerated hopes for an output freeze,” said Commerzbank oil analyst Carsten Fritsch.
Saudi Foreign Minister Adel al-Jubeir said on Thursday that OPEC and non-OPEC oil producers were increasingly moving towards a common position.
