LONDON: Brent oil plunged $3 to just over $100 a barrel yesterday, extending a two-week selloff that has knocked nearly 10 percent off prices as part of a wider flight by investors from commodities.
Brent crude headed down for the eighth time in 10 sessions, in what analysts said indicated that a host of weak fundamental signals were dominating sentiment. In the United States, crude oil stockpiles have ballooned to 30-year highs as domestic output surges, with no end in sight. Demand globally has struggled due to economic uncertainty in top consuming nations.
Front-month May Brent, which expired yesterday, traded as low as $100.02 a barrel in early US activity, and was down $2.86 to $100.25 a barrel by 1:22pm EDT (17:22 GMT). Over the past 10 sessions, prices have dropped 9.7 percent, sending the contract to just over 26 on the 14-day Relative Strength Index. Commodities are generally considered oversold if they dip below 30 on that index. US crude traded down $2.54 to $88.75 a barrel, to the lowest level since mid-December.
US petrol futures gave up 1.6 percent to trade at $2.76 per gallon, hitting the lowest level for this time of year since 2010. Heading into the summer driving season, U. stockpiles of the fuel are currently nearly 4.9 million barrels over the five year average, while demand is at the lowest seasonal level since 2003, according to US government data.
Reuters
