A sample of crude oil sits in a bottle for testing at a multiple well platform (Photographer: Andrey Rudakov/Bloomberg)

Oil Slides as U.S. Stockpiles Swell, Factory Orders Disappoint

(Bloomberg) -- Oil fell the most in a week amid reports of swelling crude stockpiles and disappointing economic activity in the U.S.

Futures declined 1.3 percent on Monday in New York. Supplies at a key crude storage hub in Cushing, Oklahoma, jumped by almost 1 million barrels last week, data provider Genscape Inc. was said to report. Meanwhile, the U.S. government said factory orders unexpectedly fell in November, a warning sign for demand.

Oil Slides as U.S. Stockpiles Swell, Factory Orders Disappoint

Since the start of this year, crude prices have recovered about half of what they lost in the final three months of 2018 as the impact of OPEC-led production cuts have been somewhat offset by economic growth concerns. A jump in the value of the dollar on Monday added another hurdle, undermining the appeal of commodities priced in the greenback.

“Last week was a big week, so it’s natural maybe to give some of it back, especially given all the economic uncertainty,” said Sam Margolin, a Wolfe Research LLC analyst. “It’s going to take a little more time for the lower OPEC exports to the U.S. to feed through to the data but generally the trend should be pretty constructive.”

Crude’s rally has prompted hedge funds slash bearish bets on the commodity. Venezuela’s political crisis has also kept traders on edge by threatening further disruption to supplies.

West Texas Intermediate crude for March delivery dropped 70 cents to $54.56 at the close of trading on the New York Mercantile Exchange.

Brent for April settlement fell 24 cents to $62.51 on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $7.62 premium to WTI for the same month.

See also: Exxon, Chevron Muscle Up in Permian on Rig-to-Refinery Play

The Organization of Petroleum Exporting Countries’ output fell the most in two years in January, according to a Bloomberg survey of officials, analysts and ship-tracking data. Meanwhile, Venezuelan oil exports fell to 1.11 million barrels a day in January, down 11 percent in a month, after the U.S. announced sanctions on the country’s state oil company.

In America, rigs drilling for oil fell by 15 to 847 last week, the lowest since May, Baker Hughes data showed.

Other oil-market news:
  • Gasoline fell 0.3 percent to $1.4323 a gallon. 
  • BP Plc is set to report earnings this week, with investors focused on whether the benefits of project startups and new production offset concerns around rising debt.
  • U.S. refiners won’t be allowed to complete shipments of Venezuelan crude they booked before new sanctions were slapped on the Latin American nation. 

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