US oil prices extend losses over stockpiles surge

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Singapore, Nov 28: US oil prices fell further in Asian trade today as dealers focused on an unexpectedly large surge in stockpiles, stoking concerns about oversupply in the world's biggest economy.

New York's main contract, West Texas Intermediate (WTI) for January delivery was down 17 cents at USD 92.13 in mid-morning trade, after sinking USD 1.38 in New York trade on Wednesday to its lowest closing price since May 31.

European benchmark Brent North Sea crude for January rose 10 cents to USD 111.41. The drop in WTI came after the US Energy Department yesterday reported that commercial stocks of crude oil increased by three million barrels last week, well above the 500,000 forecast by analysts in a Wall Street Journal survey.

Yesterday's rise in stockpiles was the latest in a series of surprisingly large builds in recent weeks. Since September 13, commercial crude stocks have increased 35.8 million, or more than 10 per cent.

"WTI crude oil suffered significant losses over the last two days, mostly driven by stockpiles concerns in the US," Singapore-based Phillip Futures said in a note. "High US stockpiles are likely to be contributed by persistent strong production in the nation," it said, adding that output hit 8.02 million barrels in the week to November 22, the highest level since January 1989.

US oil prices traded above USD 100 a barrel for much of the summer, but have dipped below that since October 21 due to rising supplies and easing geopolitical tensions, including Washington's decision to hold off military action in Syria and better relations with Iran.

European benchmark Brent remained supported by escalating concerns over political strife in Libya, a member of the OPEC oil producing cartel, analysts said. Protesters with a wide range of demands have been blocking oil and gas export terminals since late July, causing revenues to plunge 80 per cent.

(AFP)

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