Oil heads for third weekly loss after new signs of inventory building

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By Aaron Sheldrick

Crude futures were mixed in Asian trading on Friday as fresh signs of inventory building and the Federal Reserves rate hike this week kept prices under pressure amid a global glut of oil that shows no sign of abating.

U.S. crude’s West Texas Intermediate (WTI) futures CLc1 were down 13 cents at $34.82 a barrel by 0350 GMT (10.50 p.m. ET Thursday). The contract fell 1.6 percent to $34.95 a barrel on Thursday.

Brent LCOc1 was up by 3 cents at $37.09 a barrel. It fell 33 cents to $37.06 a barrel on Thursday.

“It’s the usual story. We have plenty of oil and oil demand is weak,” said Avtar Sandu, Senior Commodities Manager, Phillip Futures in Singapore. “Everything is bearish, there is a bottom but for oil we don’t see anything yet.”

Both contracts are on track to post a third week of losses, with U.S. crude down 2.2 percent and Brent off by 2.1 percent.

Sandu said the bears won’t be satisfied till they test lows reached during the global financial crisis of $32.40 for WTI and $36.20 for Brent in December 2008.

“That’s the first target the bears are gunning for,” Sandu said. “I think they will test those and once they hit them, see whether they can press below $30 for WTI.”

Market intelligence company Genscape reported an inventory increase of 1.4 million barrels at the Cushing, Oklahoma delivery hub for WTI futures, traders who saw the data said on Thursday.

That came a day after the U.S. Energy Information Administration (EIA) said crude stockpiles across the United States rose by 4.8 million barrels last week, compared with analysts expectations for a draw.

(Reporting by Aaron Sheldrick; Editing by Ed Davies and Michael Perry)

 

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