Oil Slumps as U.S. Stockpile Increase Stirs Oversupply Concerns
Oil tumbled to its lowest level in four weeks as an unexpected increase in U.S. crude and gasoline stockpiles stoked fears that the global supply glut will remain unabated.
Futures fell as much as 5.3 percent in New York after the Energy Information Administration said American crude supplies rose by 3.3 million barrels last week, following eight straight weeks of declines. Gasoline inventories rose by about the same amount. While U.S. oil imports from Saudi Arabia plunged 55 percent, shipments from Iraq surged to the highest since 2012.
“This is really unexpected,” said Gene McGillian, market research manager at Tradition Energy in Stamford, Connecticut, in a telephone interview. “It really looks as if fears of oversupply is what’s driving the market.”
Written by Meenal Vamburkar for Bloomberg.com