Oil prices fell more than 2 per cent on Thursday, heading for their sharpest weekly loss since January, as investors brushed aside talk that Opec might freeze production and focused on a growing glut from US crude stockpiles.
Energy monitoring service Genscape’s report of a 714,282-barrel drawdown at the Cushing, Oklahoma, delivery point for US crude futures during the week ended on August 30th did little to bolster sentiment, traders said.
Investors focused instead on Wednesday's government data showing a 2.3 million-barrel build in US crude stocks in the last week, more than double what the market had expected. Inventories of distillates, which include diesel and heating oil, rose nearly 10 times as much as forecast, the data from the US Energy Information Administration showed.
Speculation
Brent crude futures were down $1.07, or 2.3 per cent, at $45.82 a barrel late on Thursday. US crude’s West Texas Intermediate (WTI) futures fell $1.12, or 2.5 per cent, to $43.58 a barrel.
Both Brent and WTI were down more than 8 per cent week-to-date for their biggest decline since mid-January. Oil prices rose as much 11 per cent in August, posting their best monthly return since April, on speculation that the Organization of the Petroleum Exporting Countries and other producers might agree on curbing output at September 26th-28th talks in Algeria.
That speculation has since fizzled, although Saudi foreign minister Adel al-Jubeir said on Thursday that Opec and non-Opec oil producers were moving towards a common position on production.
