Oil Poised for Record Two-Year Loss as U.S. Stockpiles Gain

Oil headed for its biggest two-year loss on record in New York as an expansion in U.S. crude stockpiles exacerbates a global glut.

Futures have lost 31 percent this year, poised for a second annual loss that exceeds the magnitude of the slump after the Asian economic crisis from 1997 to 1998. U.S. crude inventories increased by 102 million barrels, or more than 25 percent, over the year, according to Energy Information Administration data. Supplies at Cushing, Oklahoma, the delivery point for U.S. benchmark West Texas Intermediate crude, climbed to a record last week, according to the EIA.

Oil is trading near levels last seen during the global financial crisis amid signs the oversupply will be prolonged after the Organization of Petroleum Exporting Countries effectively abandoned output limits at a meeting earlier this month. Additionally, U.S. crude output is poised to grow for a seventh straight year.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.