Crude oil keeps sliding, nears $40 a barrel

 

http://www.marketwatch.com/story/oil-continues-descent-in-asia-moving-closer-to-40-a-barrel-2015-08-20 

Crude-oil futures dropped Thursday after a surprise buildup in U.S. oil stockpiles and persistent oversupply concerns.

The U.S. oil benchmark moved closer to the $40 a barrel mark, after settling at a fresh six-year low in the previous session, and analysts say a breach of this level could pressure oil prices further. 

Crude futures for delivery in September CLU5, -0.39%  traded at $40.52 a barrel, down 28 cents or 0.7%. The September contract expires Thursday. 

Meanwhile, October Brent crude LCOV5, -1.31%  dropped 34 cents, or 0.7%, to $46.82 a barrel.

Nymex crude lost 4.3% in the last trading session, settling at the lowest in since March 02, 2009. Brent crude lost 3.4% in the last session and has been down for four of the past five sessions.

U.S. oil prices in particular are under pressure after a surprise 2.6 million-barrel increase in U.S. commercial crude stocks last week on the back of higher imports on the Gulf Coast.

“Demand for crude will soon fall nationally from current levels in September with the onset of seasonal refinery maintenance, leading to further builds [in stockpiles],” BNP Paribas said in a report. “That crude stocks have built at a time when refinery runs are still high will impact price sentiment.”

Citi Futures also noted that latest figures from the Joint Organizations Data Initiative show Saudi Arabian oil exports rising by 430,000 barrels a day to 7.37 million barrels a day after oil production touched 10.564 million barrels a day in June, serving as a reminder of the global oil surplus.

The market consensus is only beginning to grapple with the idea that prices might have to fall further to persuade oil producers to leave more oil in the ground for later, analyst Tim Evans at Citi Futures said.

Investors also remain jittery over uncertainty about the Chinese equity market, fluctuations in the yuan, and the outlook for the country’s economic growth in general.

“For the oil markets, the focus remains on China, which set off a wave of emerging-market currency weakness when it de-pegged the yuan from the U.S. dollar last week,” Société Générale said. It said markets will be tracking the eurozone, U.S., and Chinese flash PMI data on Friday very closely.

Nymex reformulated gasoline blendstock for September RBU5, -2.54%  — the benchmark gasoline contract — fell a penny, or 0.7%, to $1.55 a gallon.