NEW YORK - Oil prices fell about 2.5 percent on Wednesday after U.S. crude inventories rose for the 10th straight week to the highest in a year, adding to worries about a worldwide supply glut.
Selling picked up just prior to the market's settlement, extending a sell-off that has cut prices by more than 30 percent since the beginning of October.
U.S. crude <CLc1> settled down $1.27, or 2.5 percent, at $50.29 a barrel, its lowest since Oct. 9, 2017. Brent crude <LCOc1> ended $1.45, or 2.4 percent, lower at $58.76 a barrel.
U.S. crude stockpiles <USOILC=ECI> rose 3.6 million barrels last week, exceeding expectations, to the most in year at 450 million barrels. After falling to 2-1/2-year lows in September, crude stocks have risen 14 percent with 10 straight weeks of increases. [EIA/S]
The steady build in U.S. crude stocks is partly due to seasonal refining maintenance, but domestic production also has surged to a record 11.7 million barrels per day.
"It's hard to get more bearish after this report after we wiped out more than 30 percent of our value in the last two months," said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut.
The market briefly pared some losses after a speech from Federal Reserve Chair Jerome Powell, who said risks to the U.S. economy are relatively balanced, suggesting the pace of interest-rate hikes may slow in coming months. That bolstered the stock market, but oil's rally didn't last. [.N]
"Oil tried to latch onto the stock market excitement but at the end of the day the selling pressure came in. What that tells you is that there are many people who are still bearish on oil," said Phil Flynn, analyst at Price Futures Group in Chicago.
Investors have sold oil over worries about slowing economic growth and Washington's decision to grant several waivers to importers of Iranian oil after re-imposing sanctions on that nation.
Crude's drop since October is on a par with the 2008 price crash and steeper than that of 2014-2015, both of which prompted the Organisation of the Petroleum Exporting Countries to agree output curbs to support the market.
The market remains nervous over whether OPEC-led producing countries, including Russia, will reach another deal when they meet on Dec. 6. Producers are discussing a supply cut of 1 million to 1.4 million bpd and possibly more, OPEC delegates have told Reuters..
Saudi Arabia said it would not cut output alone and Nigeria stopped short of committing to a new push to curb supplies.