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Oil extends losses near US$50 on signs US fuel stockpiles gained
[HONG KONG] Oil extended losses near US$50 a barrel as US industry data showed an increase in petrol stockpiles and a boost in crude inventories at the nation's biggest storage hub.
Futures lost as much as one per cent in New York after falling 2.4 per cent in the previous two sessions. Petrol supplies rose by 4.91 million barrels last week, the American Petroleum Institute was said to report. That will be the biggest gain since January if replicated in government data on Wednesday. Crude stockpiles at Cushing, Oklahoma, climbed by 2.08 million barrels.
While last month's rally sent oil into a bull market amid stronger demand prospects, prices have struggled to hold above US$52 a barrel on concern rising US output may offset Opec-led supply cuts. Members of the Organization of the Petroleum Exporting Countries and its allies need to extend the deal past March for at least three months to support prices, according to UBS Group AG.
"Risks are now to the downside for oil prices," said Michael McCarthy, a chief strategist at CMC Markets in Sydney.
"A push below US$50 could spark technical selling and West Texas could enter the old trading range of US$47.50 to US$49.50."
West Texas Intermediate for November delivery slid as much as 51 US cents to US$49.91 a barrel on the New York Mercantile Exchange, and was at US$50.14 at 7.45am in London. Total volume traded was about 37 per cent below the 100-day average. Prices fell 16 US cents to US$50.42 on Tuesday.
Brent for December settlement dropped 21 US cents, or 0.4 per cent, to US$55.79 a barrel on the London-based ICE Futures Europe exchange. Prices lost 12 US cents to US$56 on Tuesday. The global benchmark crude traded at a premium of US$5.33 to December WTI.
Nationwide crude stockpiles fell by 4.08 million barrels last week, the API said on Tuesday, according to people familiar with the data. An Energy Information Administration report on Wednesday is forecast to show supplies slid by 500,000 barrels, according to the median estimate in a Bloomberg survey.