Oil hit by stockpile gain at US hub and emerging-market tumult

Oil held losses below $69 a barrel after an industry report showed inventories at a key US storage hub rose while deepening turmoil in emerging markets raised fears over energy demand.

Futures in New York were little changed after slumping the most in three weeks on Wednesday. Stocks in emerging economies slid toward bear-market territory and a basket of developing-nation currencies traded near the lowest since May 2017.

Meanwhile, the American Petroleum Institute was said to report crude inventories at Cushing in Oklahoma added 631 000 barrels last week.

Crude prices had been caught in a tug of war between bulls and bears in recent weeks as speculation that US sanctions on Iran’s exports will tighten global supplies countered signs of rising inventories and pledges by other OPEC members to boost output.

Now, as fear of a contagion spreads across emerging markets, concerns are growing that oil demand will weaken as a stronger dollar makes imports costlier for developing economies.

“Investors are increasingly cautious,” said Makiko Tsugata, a senior analyst at Mizuho Securities. Factors such as the emerging-market currency slump that could lead to lower demand are “making it difficult for investors to aggressively bet on oil,” she said.

West Texas Intermediate for October delivery traded at $68.51 a barrel on the New York Mercantile Exchange, down 21 cents, at 08:35. The contract slumped $1.15 to $68.72 on Wednesday. Total volume traded was 39% below the 100-day average.

Brent for November settlement dipped 10c to $77.17 a barrel on the ICE Futures Europe exchange, after losing 1.2% on Wednesday. The global benchmark crude traded at a $8.94 premium to WTI for the same month.

December futures in Shanghai slipped 0.4% to 519.5 yuan a barrel after dropping 0.5% on Wednesday.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
ZAR/USD
17.49
(+0.90)
ZAR/GBP
22.83
(+1.35)
ZAR/EUR
20.54
(+1.13)
ZAR/AUD
12.50
(+1.28)
ZAR/JPY
0.16
(+1.63)
Gold
1914.41
(-5.61)
Silver
24.83
(-14.54)
Platinum
931.00
(-5.42)
Brent Crude
44.95
(+1.33)
Palladium
2081.07
(-6.36)
All Share
57168.24
(+0.72)
Top 40
52831.61
(+0.76)
Financial 15
10215.75
(+3.21)
Industrial 25
75524.64
(+1.14)
Resource 10
58677.82
(-0.46)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 960 votes
It depends on how the funds are used.
74% - 6390 votes
No. We should have gotten the loan elsewhere.
15% - 1317 votes
Vote