Crude oil drops amid Goldman Sachs warning


Crude prices edged lower on Monday, staying under pressure after two straight weeks of losses, on worries that the oversupply in oil products could swell from unseasonably warm weather and the waning maintenance cycle for US refineries.
Influential Wall Street trading house Goldman Sachs warned of downside risk for oil prices through spring 2016 as US and European storage utilization for distillates, which include diesel, neared historic highs.
Traders told Reuters that as refined oil product storage tanks fill up, unwanted diesel and jet fuel cargoes were backing up outside Europe’s ports and taking longer, slower routes around the southern tip of Africa.
“There’s talk in the market about ULSD (ultra low sulfur diesel) storage potentially reaching ‘tank tops’, and that’s weighing on crude,” said Dave Thompson of Washington-based broker Powerhouse.
Brent, the global benchmark for crude, was down 20 cents, or 0.4 percent, at $47.79 a barrel by 1528 GMT. US crude futures fell 43 cents, or about 1 percent, to $44.17.
ULSD futures in the US and gas oil in London LGOc1 were also down about 1 percent.
Both crude benchmarks have lost about 10 percent over the past two weeks combined.


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