Oil Near Six Year Low as Supply

Crude oil fell to the lowest level in almost six years in New York as rising production swells U.S. stockpiles.
West Texas Intermediate dropped as much as 2 percent, widening its discount to Brent to the most in a month. U.S. crude supplies rose to the highest level in weekly data going back more than three decades, the Energy Information Administration said Wednesday.

Oil has collapsed about 40 percent since the Organization of Petroleum Exporting Countries decided to maintain its output target on Nov. 27, challenging non-OPEC producers to curb their supplies first to alleviate a global surplus. U.S. production rose to the highest since at least 1983 last week, signaling that non-OPEC output hasn’t yet faltered.

“U.S. stockpiles are still very high and the fundamentals are weak,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “The market will continue to come under pressure. There is really not anything bullish out there.”

West Texas Intermediate for March delivery slipped 84 cents, or 1.9 percent, to $43.61 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Prices fell as low as $43.58, the lowest since March 12, 2009. The volume of all futures traded was about 18 percent below the 100-day average for the time of day.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza