After U.S. benchmark oil futures fell back into a bear market overnight, crude futures are down modestly in Asia but still above session lows ahead of weekly U.S. oil data.
Oil fell a fresh 2% Tuesday, which for West Texas Intermediate meant it had fallen at least 20% from 2017's highest close--logged in February. Brent, meanwhile, is 19.4% below its most-recent high, set in January. A 20% decline for an asset price is considering resulting in a bear market.
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For WTI, this is the 5th bear market since oil started its slump three years ago as the commodity has seen four 20%-plus rallies since that initial tumble.
Such gains are generally said to mean an asset is in a bull market. But not many would say that oil has been in such a state since 2014's slump began.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August recently down 0.2% at $43.43 a barrel in the Globex electronic session. Brent crude on London's ICE Futures exchange dropped 0.2% to $45.91.
Prices didn't move after Saudi Arabia's state news energy said King Salman has named his son as crown prince; Mohammed bin Salman had been deputy crown prince.
Rising production from the U.S., Libya, and Nigeria, as well as stubbornly high stockpiles globally are undermining views that the ongoing production cuts led by the Organization of the Petroleum Exporting Countries and Russia will lift prices. Money managers had placed a record number of bets that oil would rise even after topping $50, but that optimism has since led to strong downside momentum as those traders backtrack.
The Bank of Russia offered a sobering outlook on oil in its latest monetary-policy report, saying output growth in those three countries--along with a slowing economy in China and general ebbing demand for energy--could result in prices hitting $25 a barrel by mid-2018. Crude hasn't been that low since 2003.
In focus for oil traders today is weekly U.S. inventory data. The American Petroleum Institute said after Tuesday's trading settlement that oil stockpiles fell but that gasoline supplies continued to rise as American refiners run at record levels.
The Energy Information Administration said overnight that domestic refinery runs were averaging nearly 18 million barrels a day to start June. That's only happened 24 times since the Energy Department's statistical arm started keeping track in 1990--all since July 2015. Since that August, American refiners have increased their refining capacity some 659,000 barrels a day. That's helped allow U.S. petroleum-product inventories, products supplied and exports all exceed 5-year averages.
Still, some bulls are betting demand will mop up current oil output and possibly shift the market into a deficit.
Earlier this week, China granted more import quotas to nongovernment-owned entities. The latest addition pushes the full-year quotas for this group to 91.7 million tons, or 1.8 million barrels day, a 4.7% jump from last year. "This means China's increased imports and OPEC's cuts could potentially reduce global supply by 3.6 million barrels a day," said a Chinese crude trader.
China's crude imports averaged 7.7 million barrels a day in 2016. Analysts believe that will be topped this year.
Nymex reformulated gasoline blendstock for July was recently up 0.1% at $1.4253 a gallon, August diesel was flat at $1.4025 and July ICE gas oil was up 0.6% at $415 a metric ton.
Write to Jenny W. Hush at email@example.com
Corrections & Amplifications
Story corrected at 0411 GMT. Original incorrected reported that Brent oil futures are 19.4% above their recent high.
Brent oil futures are 19.4% below their recent high. "Oil Stabilizes After Latest Slide," published at 11:55 a.m. ET, incorrectly said 19.4% above.
(END) Dow Jones Newswires
June 21, 2017 00:21 ET (04:21 GMT)