Oil Plunges to Another 6-year Low on Surprise Supply Increase

© Sheng Li/Reuters
© Sheng Li/Reuters

Oil extended losses after a government report showed that U.S. crude stockpiles unexpectedly increased.

U.S. crude inventories rose 2.62 million barrels last week, according to the Energy Information Administration. An 820,000 barrel stockpile decline was projected by analysts surveyed by Bloomberg. Futures fell earlier amid signs that shipments from the Organization of Petroleum Exporting Countries will grow.

Oil has tumbled more than 30 percent since this year’s peak close in June amid signs that producers are maintaining output even after a surplus pushed prices into a bear market.

West Texas Intermediate for September delivery, which expires Thursday, fell 88 cents, or 2.1 percent, to $41.74 a barrel at 10:32 a.m. on the New York Mercantile Exchange. Prices dropped to $41.87 on Monday, the lowest settlement since March 2009.

Brent for October settlement slipped 38 cents to $48.43 a barrel on the London-based ICE Futures Europe exchange.

U.S. crude Inventories rose to 456.2 million in the week ended Aug. 14, the EIA report said.

OPEC has pumped above its 30 million-barrel-a-day quota for more than a year, according to data compiled by Bloomberg. Angola plans to ship 1.83 million barrels a day in October, the most since November 2011, the loading program shows. That compares with 1.77 million barrels a day from Africa’s second- largest crude producer in September.

Iraq must increase oil output to meet the needs of its growing population and provide services, Prime Minister Haidar Al-Abadi said on his website. The nation’s production climbed to a record 4.18 million barrels a day in July, according to the International Energy Agency.

Written by Mark Shenk of Bloomberg

(Source: MSN)

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