Prices hit low in fear of oil glut
Oil dropped to the lowest level in more than four months in New York amid speculation a global glut that drove prices into a bear market will be prolonged.
Goldman Sachs Group said the global crude oversupply is running at 2m barrels a day and storage may be filled by the autumn, forcing the market to adjust, analysts including Jeffrey Currie said in the report yesterday.
US crude supplies remain more than 90m barrels above the five-year seasonal average for the time of year, Energy Information Administration data on Wednesday showed.
West Texas Intermediate and Brent oils moved into a bear market in July on signs the global surplus will persist as the US pumps near the fastest rate in three decades and the largest OPEC members produced record volumes.
"It's the familiar theme of oversupply and shaky demand," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said.
About 170m barrels of crude and fuel have been added to storage tanks and an additional 50m barrels to floating storage globally since January, according to the Goldman report. (Bloomberg)