NEW YORK U.S. crude slid on Thursday, hitting 12-year lows as domestic stockpiles grew, Goldman Sachs called for depressed prices until the second half of the year and investors fled from equities and other risky assets into safe havens such as gold.
Prices came off session lows in post-settlement trade after the Wall Street Journal quoted UAE's energy minister as saying OPEC was ready to cooperate on production cuts. Most traders were sceptical, noting that Venezuela and Russia recently called in vain for OPEC and other major oil producers to cut output.
"I will say this is the first time the UAE is weighing in" on a production cut call, said John Kilduff, partner at New York energy hedge fund Again Capital. "It’s the first time a Gulf producer is saying something."
The market "was vulnerable to a headline risk and it seems to have got it. Otherwise there's nothing new."
Earlier, U.S. crude plumbed a new 2003 low and Brent fell below $30 a barrel after data showing strong, steady growth in U.S. and global oil inventories.
Both benchmarks extended steep weekly slides, with U.S. crude down 14 percent and Brent 10 percent for the week so far.
U.S. crude CLc1 settled down $1.24, or 4.5 percent, at $26.21 a barrel. It fell in post-settlement trade to a 12-year low of $26.05, before paring losses after the Journal headline on OPEC.
Brent LCOc1 settled down 78 cents, or 2.5 percent, at $30.06 per barrel. It fell as low as $29.92.
Investors shoveled funds into safe havens. Gold prices surged to a one-year high and U.S. Treasury yields plunged. [GOL/] [US/]
Market intelligence firm Genscape reported a build of almost 425,000 barrels in the week to Feb. 9 at the Cushing, Oklahoma delivery hub for U.S. crude. On Wednesday, government data showed crude inventories in Cushing hit all-time highs just shy of 65 million barrels during the week ended Feb. 5.
Traders scrambled to buy bearish U.S. crude options, particularly for $25 puts. Technical analysts said the $25 level could be hit within days.
Investment bank Goldman Sachs said in a note to clients it expected U.S. oil prices to fluctuate between $20 and $40, with significant volatility and no trend until the second half.
Oil has fallen almost 75 percent since mid-2014 as global crude output exceeded demand by 1-2 million barrels daily. China's economy has hit the lowest growth in a generation, further limiting demand for oil.
(Additional reporting by Devika Krishna Kumar and Catherine Ngai in New York and Simon Falush in London; Editing by Marguerita Choy and David Gregorio)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Feb 12, 2016 03:30:13 IST