Oil Declines to Two-Week Low as Global Stock Rout Deepens

Crude futures in New York fell a third day, sliding as much as 1.3 percent. Stock indexes from Japan to Germany tumbled on Tuesday after a frantic sell-off in U.S. shares sent the Dow Jones Industrial Average to its biggest loss in 6 1/2 years. Nonetheless, oil market conditions look “solid” thanks to production cuts by OPEC, according to Vitol Group, the world’s largest independent energy trader.

Oil is being swept into the global sell-off at a time when concerns are emerging that a rally in crude is overdone. Speculation is also rising that U.S. shale production and stockpiles will undermine efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. The number of rigs drilling for crude in America has jumped to the highest in almost six months, and U.S. output breached 10 million barrels a day to the highest in more than 40 years in November.

Concern that American oil may thwart a further rally in crude prices has also been weighing on investors’ minds. U.S. inventories probably grew 3 million barrels a day in the week through Feb. 2, according to a Bloomberg survey ahead of government data due Wednesday. Nationwide crude stockpiles in the previous week added 6.78 million barrels, the biggest gain in barrel terms in almost 11 months.
more at:  https://www.bloomberg.com/news/articles/2018-02-06/oil-drops-near-63-as-markets-slump-u-s-stockpiles-seen-rising