Oil Tumbles a Second Day as U.S. Crude Stockpiles Seen Rising
Oil dropped for a second day before government data forecast to show U.S. crude stockpiles expanded, exacerbating a global glut.
Futures fell as much as 5.7 percent in New York. Supplies probably rose by 4 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. The Russian leg of Venezuelan Oil Minister Eulogio Del Pino’s tour to persuade major oil exporters to cut production gained little more than pledges for further discussion. BP Plc posted a 91 percent decline in fourth-quarter earnings Tuesday, while Exxon Mobil Corp.’s earnings fell 58 percent.
"February, March and April will be very tough for the oil market," said Scott Roberts, portfolio manager and co-head of high yield who manages $2.7 billion at Invesco Advisers Inc. in Atlanta. "Oil supplies are so high that it’s reasonable to expect a retest of the recent lows during the next few months."
Oil has lost 18 percent this year amid volatility in global markets, brimming U.S. crude supplies and the outlook for increased exports from Iran after the removal of international sanctions. Royal Dutch Shell Plc had its debt rating cut to the lowest since Standard & Poor’s began coverage in 1990, while Sanford C. Bernstein & Co. warned investors in Asian producers to prepare for a wave of writedowns.
West Texas Intermediate for March delivery fell $1.32, or 4.2 percent, to $30.30 a barrel at 1:07 p.m. on the New York Mercantile Exchange. The contract slid 6 percent to $31.62 on Monday. The volume of all futures traded was 47 percent above the 100-day average. Prices rose 4.4 percent last week.
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http://www.bloomberg.com/news/articles/2016-02-01/oil-declines-a-second-day-as-u-s-crude-stockpiles-seen-rising