Oil prices extend losses as glut worries persist

By Keith Wallis
SINGAPORE, Oct 27 (Reuters) - Oil prices fell on Tuesday, on
course for a third week of losses as U.S. inventory data is
expected to show another increase in crude stocks.
Brent LCOc1 for December delivery had fallen 38 cents to
$47.16 a barrel by 0225 GMT, after settling the previous session
down 45 cents, or almost 1 percent.
U.S. crude CLc1 for December delivery dropped 51 cents to
$43.47 a barrel, having ended the day before down 62 cents, or
1.4 percent.
The fall in U.S. crude pushed it below technical support
levels, said Ric Spooner, chief market analyst at Sydney's CMC
Markets.
"While you can never be certain, (charts) suggests this is
not going to be a false break. The latest breakdown follows
failure at the 200-day moving average a couple of weeks ago," he
said in a blog post.
U.S. commercial crude oil stockpiles likely rose for a fifth
straight week, by an average of 3 million barrels to 479.6
million, in the week ended Oct. 23, a preliminary Reuters survey
taken ahead of industry and official inventory data, showed on
Monday. urn:newsml:reuters.com:*:nL1N12Q1P7
While stocks of distillates, which include diesel and jet
fuel, were seen falling 2 million barrels, storage utilisation
for distillates in the U.S. and Europe is nearing historic
highs, according to a report on Monday by Goldman Sachs (N:GS).

"Oil is still in a bit of a funk," said Ben Le Brun, market
analyst at Sydney's OptionsXpress.
"Inventories ... (and) U.S. production numbers continue to
disappoint the market," he said.
"Producers are squeezing as much production as they can."
Investors are also waiting for the outcomes of key policy
meetings this week to give some direction to the market, Le Brun
said.
That includes the outcome of a two-day U.S. Federal Reserve
Open Market Committee policy meeting which starts later on
Tuesday and China's fifth plenum, a four-day meeting of the
Communist Party's central committee, that began on Monday.
China's policy meeting is expected to set a 7-percent annual
growth target in its 13th Five-Year plan, a blueprint for
economic and social development between 2016 and 2020.