Gasoline stockpiles rose 10.6 million barrels last week, the most since May 1993, government data show.
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February West Texas Intermediate crude CLG6, -4.67% gave up $1.48, or 4.1%, to $34.49 a barrel on the New York Mercantile Exchange, setting it on track for its lowest settlement since February 2009.
Moreover, the drop in crude-oil supplies could be temporary, analysts said.
In economic news, Eurozone’s jobless rate fell for a third straight month in November to its lowest level in more than four years, figures from Eurostat showed.
The People’s Bank of China (PBOC) on Thursday set the yuan 0.5 per cent lower than Wednesday’s close, taking the yuan to the lowest point since March 2011, which is seen as a bid to make Chinese exports cheaper.
Cairn India (down 6.31%), ONGC (down 4.70%), Oil India (down 2.77%) and Reliance Industries (RIL) (down 0.91%) edged lower.
“Negative sentiment is hurting demand expectations, growth is easing in China and there is a spillover from the inventory build in (US) gasoline stocks from yesterday and this is reflected in prices”, said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
Unsurprisingly, three-month delivery contracts of copper (down 0.5%), nickel (down 0.2%), lead (down 2.1%), zinc (down 1.7%) and tin (down 3.0%) headed lower prior to the LME close, but primary aluminium (up 0.4%) futures marginally rose. The last time the price of Brent was so low was in July 2004. “We don’t want to start a sort of a price war”, Mohsen Qamsari, director general for global affairs of the National Iranian Oil Company (NIOC), told Reuters in an interview.
It had closed below $35 for the first time in more than 11 years at $34.23 a barrel.
Natixis said in a research note that global demand should increase by 1.1 million barrels per day (bpd) as opposed to 1.7 million bpd in 2015.
The global and US domestic benchmarks of crude are coming a dreary year when each tumbled by more than 30%, amid record-high output among the world’s top producers.
A growing rift between Saudi Arabia and Iran isn’t helping either: It reduces the odds of OPEC agreeing to cut back production.
The Asian stocks fell for a fourth day after another sell-off in China triggered the second day-long suspension in four days.
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“The (oil) market fears with the Chinese economy slowing down, China’s crude demand will drop as well”, said Daniel Ang, a Phillip Futures energy analyst. “I still believe we’ll see production fall by about 500,000 barrels this year”.
