Prices Continue Tumble As Market Loosens

Oil prices were volatile through the European session on Tuesday trading in a $2 range and have stepped down again following API data showing a US crude stock build. They are now down around another percent to be sharply lower since the 30 November OPEC+ announcement driven by ongoing demand worries in a strong supply environment. They were also weighed down by a stronger dollar (USD index up 0.3%).

• WTI fell 1.3%% to $72.06/bbl, through the bear trigger of $72.37 which if sustained will open up $70.96. It is close to the low of $72.02. It made a high of $74.12 in the NY morning. WTI is now down 7.4% from before the OPEC announcement last week, consistent with the bearish trend outlook.
• Brent is down 1.3% to $77.05, close to the intraday low of $77.01. It reached a high early in the European session of $79.09. It is approaching the bear trigger at $76.71, November 16 low.
• Bloomberg reported that US crude stocks rose 594k barrels in the latest week, according to people familiar with the API data. Gasoline rose 2.8mn and distillate 1.9mn. The official EIA data is released later today.
• Saudi Arabia cut selling prices for shipments to Asia, which is a sign of a loose market despite its efforts to support it with output cuts. The market is sceptical the new OPEC quotas will be adhered to given the voluntary nature of the new reductions.
• Non-OPEC supply has been rising strongly, especially from the US. According to Bloomberg, US oil exports are forecast to reach an all-time high of almost 6mbd.