The silhouettes of pumpjacks are seen above oil wells in the Bakken Formation near Dickinson, North Dakota, U.S. (Photographer: Daniel Acker/Bloomberg)

Oil Near $69 as U.S. Supply Estimated to Drop a Third Week

(Bloomberg) -- Crude plunged to a two-week low as emerging-market stocks tumbled to the edge of bear market territory.

Futures in New York slid 1.4 percent on Thursday. Emerging-market stocks extended losses from a January peak to 20 percent, the threshold of a bear market. Meanwhile, the Energy Information Administration reported rising fuel stockpiles across the U.S. at the same time as supplies at the nation’s largest crude distribution hub in Cushing, Oklahoma, also expanded last week.

“Bear market territory or not, there is some weakness there,” said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise. Investors are focusing on “what that might mean in the future for global oil demand. It’s just a risk-off day.”

Oil Near $69 as U.S. Supply Estimated to Drop a Third Week

Aside from the emerging-market scare, traders are focused on U.S.-imposed sanctions on Iran. As the early-November deadline set by the U.S. on Iran’s exports nears, JXTG Holdings Inc., Japan’s biggest refiner, and domestic rival Idemitsu Kosan Co. are both said to have skipped purchases of Iranian supplies loading in October.

West Texas Intermediate for October delivery slid 95 cents to settle at $67.77 a barrel on the New York Mercantile Exchange. Total volume traded was about 9 percent below the 100-day average.

Brent for November settlement fell 77 cents to end the session at $76.50 a barrel on the ICE Futures Europe exchange. The global benchmark crude traded at a $8.98 premium to WTI for the same month.

The EIA reported gasoline supplies rose 1.85 million barrels last week, while distillate fuel stocks increased by 3.12 million. Cushing stockpiles expanded by 549,000 barrels, overshadowing a decline in crude inventories of 4.3 million.

Reports of stockpile increases “to a great extent has created some negativity,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto. There is concern “that there may be a bit of a demand decline.”

Other oil-market news:

  • Gasoline futures dipped 0.7 percent to settle at $1.9510 a gallon, the lowest since March.
  • OPEC oil shipments will increase by 450,000 barrels a day to 25.29 million a day in the four weeks to Sept. 22 versus the period to Aug. 25, tanker-tracker Oil Movements said in a weekly report.
  • The price of access to unexplored shale assets in the Permian Basin soared to more than $95,000 an acre in a U.S. government auction.
  • Schlumberger Ltd., Baker Hughes and Halliburton Co. are bidding to drill for oil in waters off Kuwait, according to a person familiar with the matter.
  • Continental Resources Inc., the shale-oil producer controlled by billionaire Harold Hamm, is targeting a fourfold return on a royalties investment with Franco-Nevada Corp.

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