Oil sinks to eight-week low after surprise U.S. stockpile build
Pubdate：2018-08-16 11:24
Source：ERIN DOUGLAS
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NEW YORK (Bloomberg) -- Oil plunged after U.S. stockpiles swelled by the most since March 2017 and as investor concern increased that the U.S.-China trade war and Turkish crisis will undercut demand.
Futures in New York fell as much as 3.8% on Wednesday to the lowest level since June 21. American crude inventories increased by 6.81 MMbbl last week, the Energy Information Administration reported, contrary to analyst estimates for a 2.5-MMbbl decline in a Bloomberg survey.
"The headline number along with the negativity in the overall market was taken as a very bearish number," said Phil Flynn, senior market analyst for Price Futures Group Inc. "We’re reacting to the shock value of the big build."
Both nationwide stockpiles and supplies in the key storage hub of Cushing, Okla., increased last week.
West Texas Intermediate crude for September delivery fell $2.08 to $64.96/bbl on the New York Mercantile Exchange at 11:39 a.m.
Brent for October settlement fell $1.69 to $70.77/bbl on the London-based ICE Futures Europe exchange, and traded at a $6.39 premium to WTI for the same month.
Meanwhile, copper and other metals tumbled on concerns that the Turkish crisis will spill over into emerging markets. Copper slumped to the lowest in a year while nickel and zinc also retreated on fears that Turkey’s currency plunge will spread, unnerving investors already rattled by a trade dispute between the U.S. and China.
"We’re seeing a bit of ratcheting up of worries about demand growth and that is underpinned by the the tariff issues with China and whether we might be seeing signs of demand growth in Asia starting to come off a little," said Gene McGillian, market research manager for Tradition Energy. He said investors are wondering whether the crisis in Turkey could be a contagion issue.
