Oil Slides to Lowest Since March as Goldman Sees Glut
Oil dropped to the lowest level in more than four months amid speculation a global glut that drove prices into a bear market will be prolonged.
Goldman Sachs Group Inc. said the global crude oversupply is running at 2 million barrels a day and storage may be filled by the fall, forcing the market to adjust, analysts including Jeffrey Currie said in the report dated Thursday. U.S. crude supplies remain more than 90 million barrels above the five-year seasonal average, Energy Information Administration data on Wednesday showed.
Oils moved into a bear market in July on signs the global surplus will persist as the U.S. pumps near the fastest rate in three decades and the largest OPEC members produced record volumes. The Bloomberg Commodity Index, which fell almost 11 percent in July, has resumed its decline.
“Prices are under pressure because we’ve got more and more crude coming out of the ground,” Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital LLC in Miami, said by phone. “Questions about storage capacity have already been brought up.” (by Mark Shenk, Bloomberg Business)