Oil prices fell about 3 percent on Thursday to four-year lows after government data showed US crude stockpiles surged at the delivery point for crude futures. The declines compounded losses from Wednesday after comments by the Saudi oil minister raised fears the world's top oil exporter will not agree to output cuts at the Organisation of the Petroleum Exporting Countries' meeting on November 27.
The US government's Energy Information Administration said stocks at the Cushing, Oklahoma, delivery hub for US crude rose 1.7 million barrels for the week ended November 7, while gasoline stocks surged 1.8 million barrels. Those numbers overshadowed the overall drop of 1.7 million barrels in crude inventories and a surge in refinery runs and a 2.8 million-barrel draw in distillate stocks.
"To me, the market's reaction confirms just how bearish sentiment is. Even with decent numbers like these, the market can't rally," said Kyle Cooper, managing director at IAF Advisors in Houston. Brent was down $2.03 at $78.35 a barrel by 2:19 pm EST (1919 GMT), after plumbing a September 2010 low of $77.99. US crude fell $2.45 to $74.73 a barrels, after going as low as $74.53, also a trough from September 2010.
Heating oil also fell about 3 percent and gasoline blendstock RBOB tumbled 4 percent after the inventory data. Oil prices has slumped some 30 percent since Brent hit a June high above $115 on fears of an oil glut. Qatar expects to lower oil output to about 500,000 barrels per day by the end of November from 650,000 bpd at the end of October and from 800,000 a month before that, an industry source familiar with the matter said. Worries about No 2 economy China added to the market's woes after data showing slower factory expansion and a near 13-year low in investment growth.
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