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Oil futures plunge to 4-year lows amid global supply glut

Published 11/13/2014, 10:13 AM
Oil futures plunge to 4-year lows

Investing.com - Oil futures tumbled to the lowest level in more than four years on Thursday, as ongoing concerns over a glut in world markets continued to drive prices lower.

On the ICE Futures Exchange in London, Brent for January delivery fell by as much as 2.2% to touch a daily low of $79.32 a barrel, the weakest level since October 2010.

Prices recovered to last trade at $79.54 during U.S. morning hours, down $1.60, or 1.98%.

Brent prices have fallen nearly 32% since June, when it climbed near $116 a barrel amid indications the Organization of the Petroleum Exporting Countries will not cut output to relieve a global supply glut.

Oil ministers from Saudi Arabia and Kuwait have resisted calls to lower production, while Libya, Venezuela and Ecuador have asked for action to prevent further price declines.

The 12-member oil cartel is scheduled to meet in Vienna on November 27 to discuss whether to adjust their production target for 2015.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in December lost $1.45, or 1.88%, to trade at $75.73 a barrel, the lowest level since October 2011.

U.S. oil futures are down almost 29% from a recent peak of $107.50 in June.

Oil traders awaited the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

Thursday’s government report was expected to show that U.S. crude oil stockpiles rose by 0.8 million barrels last week, while gasoline stockpiles were forecast to increase by 0.6 million barrels.

The data comes out one day later than usual due to the Veterans Day holiday in the U.S. on Tuesday.

After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories declined by 1.5 million barrels in the week ended November 7.

The report also showed that gasoline stockpiles rose by 1.1 million barrels, while distillate stocks decreased by 1.3 million barrels.

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