Brent touches $57.20 on fears of oversupply

This Oct. 9, 2018, file photo shows an oil rig and pump jack in Midland, Texas.   | Photo Credit: AP

Oil prices fell on Tuesday after reports of swelling inventories and forecasts of record U.S. and Russian output, combined with a sharp sell-off in stock markets, as the outlook for global growth deteriorated.

U.S. crude oil dropped $2.04, or 4.1%, to a low of $47.84, its weakest since September 2017. It recovered to around $49.28, down 60 cents, by 14.20 GMT. North Sea Brent lost $2.41, or 4.0%, to $57.20, a 14-month low. Brent last traded around $59.01, also 60 cents lower.

Both oil benchmarks have shed more than 30% since early October due to swelling global inventories.

World stock markets tumbled on Tuesday, as fears about a slowing global economy gripped investors, just as the U.S. Federal Reserve looked set this week to deliver its fourth interest-rate hike of the year. Investor confidence is deteriorating with more fund managers expecting global growth to weaken over the next 12 months, the worst outlook in a decade, Bank of America Merrill Lynch’s December investor survey showed. Japan’s Nikkei lost 1.8% after U.S. stocks dropped to their lowest in more than a year.

“A large part of the move is due to a broader market sell-off, with both U.S. and Asian equity markets coming under pressure,” said commodities strategist Warren Patterson at Dutch bank ING. The OPEC and other oil producers have agreed to curb production by 1.2 million barrels per day, or more than 1% of global demand, in an bid to boost prices.

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Printable version | Oct 22, 2021 9:05:41 AM |

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