Oil prices slide on lofty supplies

February 24, 2015 | 12:08

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Oil prices fell on Monday (Feb 23), extending last week's slide as US crude supplies linger at historic levels.

A motorist filling up petrol at a pump kiosk. (AFP/Fadel Senna)

NEW YORK: Oil prices fell on Monday (Feb 23), extending last week's slide as US crude supplies linger at historic levels.

The US benchmark West Texas Intermediate for April delivery shed US$1.36 to US$49.45 a barrel on the New York Mercantile Exchange. European benchmark Brent oil for April delivery fell US$1.32 to US$58.90 a barrel in London trade.

"The supply dynamic is just too great," said John Kilduff, founding partner at hedge fund Again Capital. A note from Commerzbank rued that Friday's weekly US oil rig count fell only 37, the smallest decline in seven weeks.

"Evidently, the strong recovery in oil prices since the end of January has slowed the scaling back of drilling activity," Commerzbank said.

The rig count came on the heels of a US Department of Energy report that showed US oil stocks at their highest level at this time of year fon record. US oil prices have dropped more than 50 per cent since June.

Traders are also fixating on the expansion of a labor strike in US refineries as the United Steelworkers announced over the weekend that as many as three more plants would see work-stoppages in addition to the 11 already hit.

Kilduff said the strike has given support to petroleum product prices. However, if refineries suspend significant production due to the strike, that would likely add to the glut of crude supply, he said.

AFP

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