Oil extends losses as markets fall, inventories climb

LONDON: Oil prices slumped to two-week lows on Thursday as global stock markets fell, with investor sentiment made more bearish by an industry report showing US crude inventories rising more than expected.
Brent crude LCOc1 fell $1.74 a barrel to a low of $81.35, its lowest since September 27, before recovering a little to trade around $81.70 by 0850 GMT. Brent lost 2.2 per cent on Wednesday. On October 3, it hit a four-year high of $86.74.
US light crude CLc1 dropped $1.37 to $71.80 but then recovered to around $72.05. The contract lost 2.4 per cent in the previous session.
“The up-trend is over for the moment, and a new direction is settling in,” said Robin Bieber, technical chart analyst at London brokerage PVM Oil. “The market looks like heading lower, with valid targets south.”
Share 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.
US crude stockpiles rose more than expected last week, while gasoline inventories increased and distillate stocks drew, the American Petroleum Institute said on Wednesday.
Crude inventories climbed by 9.7 million barrels in the week to October 5 to 410.7 million, compared with analyst expectations for an increase of 2.6 million barrels.
— Reuters