Oil has fallen to a six-month low, and hopes of a quick rebound are fading as demand heads into an autumn swoon.
Brent crude tumbled below $50 Monday for the first time since January. Gasoline fell the most in almost three years.
The slump may have further to go. U.S. refineries, which turned a record amount of crude into gasoline during July, typically slow down from August through October for maintenance.
“We still have a lot of global oversupply,” Michael Wittner, head of oil-market research at Societe Generale SA in New York, said on Bloomberg TV Monday. “We’re getting close to the autumn where demand for crude and products hits a seasonal low point, so it’s hard to see where the uplift is going to come from.”
Also, demand for gasoline typically eases after summer as the seasonal workforce shrinks and families stop vacationing.
Hedge funds are growing more pessimistic. Money managers cut bets on rising Brent prices last week by the most in more than a year, and are the least bullish on U.S. crude since 2010.
Written by Dan Murtaugh of Bloomberg