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Oil prices dip further after U.S. stock-build, Saudi export rise

Published 20/08/2015, 10:30 am
© Reuters.  Oil prices dip further after U.S. stock-build, Saudi export rise
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* WTI hovers slightly above $40/b, Brent tests $47/b support

* U.S. stocks rose 2.6 mln barrels to 456.21 mln barrels

* Saudi June exports up 430,000 bpd

By Henning Gloystein

SINGAPORE, Aug 20 (Reuters) - Oil markets opened up weak on Thursday following sharp falls the previous session, with U.S. contracts hovering slightly above $40 per barrel, levels not seen since the credit crunch of 2009, and globally traded Brent tested support at $47.

U.S. West Texas Intermediate (WTI) crude oil slumped over 4 percent on Wednesday to hit a 6-1/2-year low as a huge unexpected stockpile build in the United States reinforced concerns about a growing global oil glut.

U.S. crude inventories rose 2.6 million barrels last week to 456.21 million barrels, the government's Energy Information Administration said.

And markets opened up weak again on Thursday. U.S. crude futures were trading at $40.69 per barrel at 0024 GMT, levels not seen since the peak of the global financial crisis of 2008/2009. Brent LCOc1 was down 11 cents at $47.05 a barrel.

"WTI prices plunged to the lowest level in more than six years after an EIA report showed that U.S. crude stockpiles unexpectedly rose 2.6 million barrels against market expectations for a small decline," ANZ bank said on Thursday.

"Despite the weak price environment, the biggest OPEC producer, Saudi Arabia, boosted its oil exports," it added.

Saudi Arabia exported 7.365 million barrels per day (bpd) in June, up from 6.935 million bpd in May, figures published by the Joint Organisations Data Initiative (JODI) showed.

The bearish sentiment is also visible in the long-term derivatives market.

Contracts for delivery of crude oil in the future on the big commodities markets such as the New York Mercantile Exchange CME.O and the InterContinental Exchange ICE.N show the price of oil for delivery in five years' time has collapsed in recent months, implying that traders do not expect a price recovery any time soon.

U.S. crude prices for delivery in 2020 cost only about $20 more than they do now, a price difference that falls further when adjusted to expected inflation and interest rates. (Editing by Michael Perry)

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