Brent Hits 4-Year Low Below $81 as Oil Continues Hunt for Bottom

NDTV Profit Desk

11 Nov 2014, 11:57 PM IST

Brent Hits 4-Year Low Below $81 as Oil Continues Hunt for Bottom

London: Oil prices continued to seek a bottom on Tuesday amid worries about growing US supplies, with benchmark Brent crude hitting a four-year low and nearing a test below the psychologically important $80 per barrel mark.

"The theme remains the same in oil: We have no meaningful way to cut production and the multi-year lows in prices that we're hitting are feeding the hunt for even lower bottoms," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

Brent was down $1.36 cents, or 1.7 per cent, at $81 a barrel by 1703 GMT (10:33 p.m. in India), after falling earlier to $80.46 - the lowest level since September 2010.

US oil's West Texas Intermediate (WTI) crude futures slid 30 cents, or 0.3 per cent, to $77.10 a barrel, after a session low at $76.42.

Industry group American Petroleum Institute (API) was expected to report at 2130 GMT (3:00 a.m. in India) that US commercial crude stocks rose last week while inventories of distillates fell and gasoline supplies remained steady, a Reuters poll showed.

The US Department of Energy's statistical arm the Energy Information Administration (EIA) will release its inventory data on Wednesday.

The Reuters poll forecast crude stocks rose 300,000 barrels on average last week.

"You have suggestions of an anaemic demand story for oil last week," said James Williams, energy economist at WTRG Economics in London, Arkansas.

A strong dollar initially weighed on oil as the greenback hit a seven-year high against the yen. By midmorning though, the dollar was down against a basket of currencies, but crude prices continued to slide.

Fear of supply disruptions in Libya, where a rival government seized the country's capital and took control of its most productive oilfield, El Sharara, helped limit the downside in oil earlier in the session, traders said.

Falling crude prices have had little impact on shale oil drilling in the United States, with output from the fastest-growing and largest shale fields showing no sign of slowing, a separate EIA report said on Monday.

JPMorgan slashed its 2015 Brent price forecast by $33 to $82 per barrel on Monday, citing supply pressures in the Atlantic Basin and the apparent inability of OPEC member states to work cohesively to cut production.