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Oil extends losses on weak US demand

Singapore, PTI | Updated : 22 October 2013, 11:03 AM

US crude oil prices stayed below USD 100 in Asian trade on Tuesday as investors digested a steep increase in stockpiles following slow refinery activity, analysts said.

New York's main contract, West Texas Intermediate (WTI) for delivery in November, was down 21 cents at USD 99.01 a barrel in mid-morning trade, extending its slide after sinking to three-month lows on Monday.

Brent North Sea crude for December delivery gained nine cents to USD 109.73.

The US Department of Energy (DoE) on Monday said crude inventories rose 4.0 million barrels in the week ended October 11, far higher than the 1.7 million increase forecast by analysts.

A rise in stockpiles indicate weak demand in the world's biggest economy and oil consuming nation, putting downward pressure on prices.

The closely watched weekly report, which typically is released Wednesdays, had been postponed because of  the 16-day US government shutdown this month.

The DoE will tomorrow report the data for the week ending October 18.

Vanessa Tan, investment analyst at Phillip Futures in Singapore, said the seasonal maintenance of refineries coupled with the movement of pipeline flows around the Cushing, Oklahoma, delivery point for WTI futures helped drive the stockpiles increase.

"This surplus of oil supplies in the near term helped to weigh on prices but some support came from expectations that the US Fed would not reduce asset purchases as its quantitative easing programme would support the demand of oil," she said in a note. 

First Published: Tuesday, October 22, 2013 10:54 AM
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