US oil prices dive below $27 a barrel
SINGAPORE: US crude tumbled below $27 a barrel in Asia on Thursday as the over saturated market struggled to cope with high inventories in the United States and an increased output from Organization of the Petroleum Exporting Countries (OPEC).
The decline came despite the weekly US Department of Energy report showing US oil stocks fell about 800,000 barrels for the week ending February 5, with traders seeing inventories still at high levels.
US benchmark West Texas Intermediate for March delivery was down 55 cents, or 2.0 percent, at $26.90 and Brent crude for April fell 32 cents, or 1.04 percent, to $30.52 a barrel at around 0215 GMT. WTI had dropped to $26.85 earlier in the session.
On January 20, WTI fell to a low of $26.19 a barrel before closing at $26.55 that same day, the lowest since May 2003.
“Given the falls that we have seen over the last three trading sessions, it is a little surprise to see such aggressive selling interest during our time zone,” said Michael McCarthy, chief market analyst at CMC Markets in Australia.
“Given the short positions and the traders involved here, it is not impossible that this is an attempt to push it through the low and induce some technical selling,” he said by telephone from Sydney.
Oil prices briefly rallied after the US commercial crude inventories report was released Wednesday.
However, prices soon dropped back as traders took note of higher supplies of gasoline, a rise in stocks at the key Cushing, Oklahoma trading hub and a scant drop in oil production.