Oil Down 3% on Supply Build; $100 Bet Looks More Distant

October 17, 2018

Investing.com – The oil market’s previous bet for $100 a barrel is turning into a bet on how much more crude could lose before the year is up.

An outsize build in U.S. inventories for a fourth week running was the latest in a bearish set of events that have transformed the bullish story in oil. Wednesday’s EIA report drove prices down as much as 3%, pushing U.S. (WTI crude) below the key $70 mark and its U.K. peer Brent under $80.

“At the least, the bulls have to cut some of the risk they’ve piled on,” said Tariq Zahir, managing member at Tyche Capital Advisors, an oil-focused hedge fund in New York.

Also weighing on the market was data from TankerTrackers, an independent oil cargo surveyor, that showed Iran exported 2.2 million barrels per day in the first two weeks of October, not far from the peak of 2.7 million bpd it shipped in May before the U.S. decision to reimpose sanctions against the Islamic state.