Oil drops to lowest since OPEC deal as U.S. crude slips below $50
Oil fell about 2 per cent on Thursday, extending the previous session's slump to prices not seen since an OPEC-led pact to cut production was agreed, as record U.S. crude inventories fed doubts about the effectiveness of the deal to curb a global glut.
U.S. crude prices fell through the $50 a barrel support level, with market participants unwinding some of the massive number of bullish wagers they had amassed after the deal.
The losses followed Wednesday's slide of more than 5 per cent, the steepest in a year, after data showed crude stocks in the United States, the world's top oil consumer, swelled by 8.2 million barrels last week to a record 528.4 million barrels.
But several analysts remained bullish on oil for the long term.
"Headline risk can capture the imagination of the market over the near term, but we see dips as short-lived, key buying opportunities," RBC analysts said in a note.
"Record high inventory levels are reason for pause, but we believe that the market is overly focused on U.S. stocks ... The U.S. will be the last of the major regions to rebalance stocks given that storage capacity remains abundant, cheap and U.S. shale is extremely elastic in a $50 per barrel price environment."
Brent crude settled 92 cents, or 1.7 per cent, lower at $52.19 a barrel. On Wednesday, the benchmark slumped 5 per cent, its biggest daily percentage move in a year.
U.S. crude extended Wednesday's 5.4 per cent losses by 2 per cent, or $1, to end at $49.28 a barrel, the first time below the $50-mark since mid December.
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Oil fell about 2 per cent on Thursday, extending the previous session's slump to prices not seen since an OPEC-led pact to cut production was agreed, as record U.S. crude inventories fed doubts about the effectiveness of the deal to curb a global glut.
U.S. crude prices fell through the $50 a barrel support level, with market participants unwinding some of the massive number of bullish wagers they had amassed after the deal.
The losses followed Wednesday's slide of more than 5 per cent, the steepest in a year, after data showed crude stocks in the United States, the world's top oil consumer, swelled by 8.2 million barrels last week to a record 528.4 million barrels.
But several analysts remained bullish on oil for the long term.
"Headline risk can capture the imagination of the market over the near term, but we see dips as short-lived, key buying opportunities," RBC analysts said in a note.
"Record high inventory levels are reason for pause, but we believe that the market is overly focused on U.S. stocks ... The U.S. will be the last of the major regions to rebalance stocks given that storage capacity remains abundant, cheap and U.S. shale is extremely elastic in a $50 per barrel price environment."
Brent crude settled 92 cents, or 1.7 per cent, lower at $52.19 a barrel. On Wednesday, the benchmark slumped 5 per cent, its biggest daily percentage move in a year.
U.S. crude extended Wednesday's 5.4 per cent losses by 2 per cent, or $1, to end at $49.28 a barrel, the first time below the $50-mark since mid December.
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