Oil drops amid persisting supply glut worries

By FXStreet Oil benchmarks on both sides of Atlantic snapped the rebound seen late Wednesday and slipped back in the negative territory as markets continue to assess the latest stockpiles report from EIA.

Oil back in the red

Currently both crude benchmarks are reverting to the broader downtrend, with WTI sliding -0.72% to 31.92 and the Brent oil slips 0.96% just ahead of 34 handle. Oil prices’ late rebound ran out of legs as omnipresent oversupply concerns continued to dent investors’ sentiment, outweighing the strong demand for gasoline.

The EIA inventory report showed, the US crude stockpiles rose 3.5 million barrels last week to reach an all-time peak above 507 million barrels. While US gasoline demand stood at 9.06 million barrels a day on Feb. 19 compared with 8.6 million on Jan. 22.

Moreover, the global growth forecasts slashed by Citi yesterday also weighed on the oil prices. Citi now expected the global economy to grow by just 2.5% this year compared to a previous forecast of 2.7%.

Economists at Citi noted, “Global growth prospects are worsening further, with deterioration across advanced economies alongside previous weakness in emerging markets.”

Looking ahead, the US economic data including today’s durable goods and Friday’s prelim GDP will …read more

Source:: FX Street