US crude oil futures slips to new 6-1/2-year low

Spot prices of Western Canada Select (WCS), a marker for heavy, diluted bitumen from Alberta’s oil sands sank to a 12-year low near $20 a barrel. WTI may drop to $US32 on the persisting global surplus, Citigroup Inc. said in a report August 19.

“While this is a clear sign that low prices will lead to less production, it was not enough to convince people yesterday”, Commerzbank senior oil analyst Carsten Fritsch said.

Oil costs slid to a recent six and a half yr low in Asia Thursday, approaching the key United States dollars forty a barrel level after a shock rise in US inventories added to considerations of a provide glut.

Angola plans to ship 1.83 million barrels a day in October, the most since November 2011, according to a preliminary loading programme obtained by Bloomberg.

“Crude oil imports climbed by 465,000 b/d which, in itself, was already enough to drive stocks up by 3.2 million barrels“.

“The trend is down – stick with it”, advises Robin Bieber, a director at London brokerage PVM Oil Associates. “Fear of slowing growth in China is increasing”.

West Texas Intermediate crude for October delivery CLV5, -2.52% fell 87 cents, or 2.1%, to settle at $40.45 on the New York Mercantile Exchange. Diesel lost 3 percent, hitting six-year lows.

It noted that EIA’s updated projection remains subject to significant uncertainties: the pace and volume at which Iranian oil reenters the market, the strength of oil consumption growth, and the responsiveness of non-OPEC production to low oil prices. The December 2006 CLZ6 contract fell $1.50 on Friday, taking its weekly loss to over 9 percent, the biggest drop in over four years.

The Indian basket, made up of 73 percent “sour” grade crude from Oman and Dubai and the balance by “sweet” grade Brent, fell to its lowest of $43.36 in January, provoking the Reserve Bank of India to make the first of its interest rate cuts this year after nearly two years. The trading channel suggests that crude oil prices could average between $33 per barrel and $43 per barrel in the short term.

The downturn is a fallout of the prolonged worldwide economic slowdown, and a historic plunge in oil prices that has affected the price of petroleum products.

OPEC pumped the most crude last month in more than three years as Iran restored output to the highest level since global sanctions were strengthened in 2012, according to the group’smonthly report.