Oil Retreats to Bear Market as Global Supply Glut Seen Growing

[Purveyor]

Source: Bloomberg

Oil fell below $40 a barrel in New York for the first time since April, falling into a bear market on concern that the global supply glut will expand.

Saudi Arabia cut prices to Asian customers as the country continues to fight for market share. Drillers in the U.S. boosted the number of rigs seeking oil for a fifth week, the longest run of gains since last August, according to data from Baker Hughes Inc. U.S. crude and gasoline supplies are at the highest seasonal level in at least two decades. West Texas Intermediate settled 22 percent below its June peak Monday, meeting the common definition of a bear market.

"We got here on the back of excessive storage in crude oil and gasoline," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. "The storage levels are so out of whack."

Oil has tumbled from its $51.23 June peak, ending a recovery that saw prices almost double from a 12-year low in February. The persistence of the supply overhang is upsetting industry expectations, with BP Plc, Royal Dutch Shell Plc and Exxon Mobil Corp. reporting second-quarter earnings last week that were worse than estimated.


Read more: http://www.bloomberg.com/news/articles/2016-07-31/oil-falls-after-u-s-drillers-bring-back-rigs-for-a-fifth-week

[Dustlawyer]

1. I hope all of the BP oil executives lose their bonuses and/or their jobs!!!

The ones at the top need to be in jail!

[Sen. Walter Sobchak]

2. Producers can stop investing, but they can't stop pumping

Producers in the west need the revenue to service their debt loads, producers just about everywhere else need the revenue to keep their heads attached.

[callous taoboy]

3. Might help explain why wine tour business is so slow here in the hill country

I drive limo part time, taking people on wine tours out here in the hill country of TX, and we used to get a lot of oil people. Been very slow this summer.

[NNadir]

4. This is very bad for the environment, since it increases the use of this deadly fossil fuel.

[ansible]

5. Gassed up for $2.13 a gallon here in Central California!