Oil prices tank after US inventories report

[NEW YORK] Oil prices tanked on Wednesday after a private report showed an unexpectedly big jump in US stockpiles, adding to concerns about the persistent global oversupply.

US benchmark West Texas Intermediate for delivery in December tumbled US$1.28 to US$42.93 a barrel on the New York Mercantile Exchange, the lowest WTI price since late August.

Brent North Sea crude for December, the global benchmark for oil, finished at US$45.81 a barrel in London, down US$1.63 from Tuesday's settlement.

A weekly report by the American Petroleum Institute issued late Tuesday showed US commercial crude inventories jumped by more than six million barrels.

"We're awfully pummelled here today," said Matt Smith of ClipperData. "Last night's API report was a huge surprise, not just because it was a build but because it was such a large build in crude inventories."

Mr Smith noted that US oil inventories are less than eight million barrels below record heights set earlier this year.

Investors will focus Thursday's Department of Energy stockpiles report, delayed because of the Veterans Day holiday on Wednesday.

The report is expected to show that oil stockpiles rose by 1.3 million barrels last week, according to a Bloomberg News survey.

High US production has added to the abundant global supplies that have pushed prices down more than half since mid-2014.

AFP