Oil drops back down

15 October 2015, News Wires – Oil fell under $49 per barrel on Thursday, as selling continued after a jump in US stockpiles shown in industry data the day before, Reuters reported.

brent.oilBrent eased $0.21 to $48.94 a barrel by 9:42am GMT. On Wednesday it hit a low of $48.71, the weakest since 5 October, it said.

US crude fell $0.51 to $46.15 a barrel after settling down $0.02 at $46.64, the news wire continued.

Data from industry group the American Petroleum Institute showed US crude stocks rose by 9.4 million barrels in the week to 9 October to 465.96 million, versus analyst forecasts for a 2.8 million barrels build, Reuters said.

Investors are awaiting inventory data from the US government’s Energy Information Administration at 3:00pm GMT. A poll of nine analysts predicted a crude stock build of 2.9 million barrels on average in the week ended 9 October.

Some analysts pointed to further weakness in the months ahead with a possible eventual interest rate rise in the US pushing the dollar higher, which makes oil more expensive for holders of other currencies.

“So here is the set up: In December the Fed will hike rates and Opec will not cut output. In the first quarter of 2016, global oil inventories rise further and oil prices will drop,” Bjarne Schieldrop chief commodity analyst at SEB in Oslo, told the Reuters Global Oil forum.

Opec meets in December. The producer group is expected to hold to its policy of maintaining market share, highlighted by Saudi Arabia’s push into Russia’s regional market

The world’s big oil exporters pumped more than half a billion barrels more crude than needed in the first nine months of this year, industry data gathered by Reuters and major energy market forecasters show.

In the first nine months of 2015, China’s crude imports rose 8.8% to 248.62 million tonnes, which some traders said had lent the market support.

“We believe the downside potential for oil prices is limited and expect to see moderately rising prices in the coming weeks and months,” Carsten Fritsch at Commerzbank said.

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