Oil drops on U.S. stockpile build, global glut

By Meeyoung Cho
SEOUL, Oct 15 (Reuters) - Crude oil futures extended their
losses on Thursday after notching up declines every day so far
this week, hit by growing U.S. stockpiles and an expanding
global glut.
U.S. crude CLc1 had fallen 25 cents, or 0.54 percent, to
$46.39 a barrel as of 0130 GMT, after settling the previous
session down 2 cents at $46.64.
Front-month Brent LCOc1 for November delivery inched down
1 cent to $49.14 a barrel, having ended the last session down 9
cents at $49.15.
"(U.S. oil) remained under pressure as the focus turns to
U.S. crude inventories. The sustained period of lower crude oil
prices has started to impact the credit profile of companies,"
ANZ said in a note on Thursday.
Data from industry group the American Petroleum Institute on
Wednesday showed that U.S. crude inventories rose by 9.4 million
barrels in the week to Oct. 9 to 465.96 million, compared with
analyst expectations for an increase of 2.8 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by
1.4 million barrels, API said. API/S
But some analysts were optimistic on the long-term outlook
for oil markets.
"(Our) base case price scenario results in Brent prices
reaching $85 per barrel by 2020, around $20 higher than the
current 2020 futures strip of about $65 per barrel," Barclays (L:BARC)
said in a report. urn:newsml:reuters.com:*:nL3N12E5QN
"What happens to oil market balances after 2016 depends
critically on three main wildcards: a slowing China's impact on
oil demand, the return of Iranian oil and the rate of mature
field decline.".
BMI Research, part of the Fitch ratings agency, said in a
note that China's crude oil imports would continue to grow over
the next five years at an average annual rate of 3.2 percent.
"This will be a result of higher refinery run rates to
produce gasoline and continued strategic stockpiling activity up
to 2020, which will help to override macroeconomic headwinds to
domestic crude demand," it said.
Asian shares rose on Thursday and the dollar struggled near
multi-week lows after weak U.S. economic data added to
expectations that the Federal Reserve will delay hiking interest
rates. MKTS/GLOB