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UPDATE 10-Brent oil drops 3 pct to near $100 in commodities rout
April 15, 2013 / 3:41 AM / 5 years ago

UPDATE 10-Brent oil drops 3 pct to near $100 in commodities rout

* Brent hits lowest since July, U.S. crude at 4-month low
    * Gold posts biggest two-day loss in 30 years
    * China Q1 GDP growth unexpectedly slips to 7.7 pct yr/yr
    * Coming up: API oil data, 4:30 p.m. EDT Tuesday

 (Updates to post-settlement trading)
    By Anna Louie Sussman
    NEW YORK, April 15 (Reuters) - Brent crude oil fell by
almost 3 percent to near $100 a barrel on Monday, extending a
two-week selloff that has sliced nearly 10 percent off prices,
as part of a wider flight by investors from commodities. 
    Gold posted its biggest two-day loss in 30 years while Brent
crude fell for the eighth time in 10 sessions in what analysts
said were indications that a host of weak fundamental signals
dominated sentiment. 
    In the United States, crude oil stockpiles have ballooned to
a 30-year high as domestic output surges, with no end in sight.
Global demand has struggled due to economic uncertainty in top
consuming nations.
    Against the background of weaker fundamentals,
lower-than-expected GDP growth from No. 2 oil consumer China
rattled the commodity complex further on Monday and pushed Brent
to near $100 a barrel for the first time since July 2012.
    The Brent contract for May delivery, which expired on
Monday, traded as low as $100.02 a barrel in early U.S. activity
before settling down $2.72 at $100.39 a barrel.
    Meanwhile, the contract for June delivery fell below
$100 a barrel for the first time since July, extending its
sell-off in post settlement trading to as low as $99.12 a
    Over the past 10 sessions, Brent prices have dropped by 10
percent, sending the contract to just over 26 on the 14-day
Relative Strength Index. Commodities are generally considered
oversold if they dip below 30 on that index.
    U.S. crude settled down $2.58 at $88.71 a barrel,
hitting the lowest level since mid-December in heavy trading,
with volumes 47 percent above the 30-day moving average. 
    "The selloff is long overdue and is a reflection of weakness
in the market that everyone had been perceiving," said Edward
Morse, global head of commodities research at Citigroup. 
    He said inventory builds in the United States would likely
continue into the third quarter and that Chinese fuel demand was
weaker than expected.
    "I struggle to find where the demand surprise could be." 
    Punctuating the bearish mood, Goldman Sachs, one of
the most influential banks in commodity markets, recommended
clients close their bets on rising Brent prices, warning the
market could continue to fall.
     U.S. gasoline futures gave up 1.7 percent to trade
at $2.75 per gallon, hitting the lowest level for this time of
year since 2010. 
    Heading into the summer driving season, U.S. stockpiles of
gasoline are nearly 4.9 million barrels over the five-year
average, while demand is at the lowest seasonal level since
2003, according to U.S. government data. 
    Monday's selling was kick-started by data showing China's
economic growth unexpectedly slowed in the first three months of
2013, falling to 7.7 percent from 7.9 percent in the final
quarter of last year. Economists had forecast 8 percent growth.
    The news compounded Friday's weak U.S. retail sales data and
forecasts for lower global oil demand growth for 2013 released
last week by the International Energy Agency, the U.S. Energy
Information Administration and the Organization of the Petroleum
Exporting Countries.
    As gold breached key support at $1,400 per ounce and copper
hit 1-1/2-year lows, the Thomson Reuters-Jefferies CRB index
, that tracks 19 commodity markets, dropped to the
lowest level since late June.
    Tensions mounted on Monday over a contested presidential
election in Venezuela, with opposition contender Henrique
Capriles urging his followers to protest Nicolas Maduro's
declared victory. 
    U.S. equity markets fell for a second straight session, with
major indices down more than 1 percent. 
    A preliminary survey of analysts by Reuters forecast U.S.
crude stocks rising by 1.4 million barrels for the week ended
April 12. Distillate stocks, which include heating oil and
diesel fuel, were projected to have fallen 300,000 barrels on
average last week. 

 (Additional reporting by Robert Gibbons, Matthew Robinson and
David Sheppard in New York, Peg Mackey in London and Jessica
Jaganathan in Singapore; Editing by Grant McCool, Dale Hudson,
Nick Zieminski and Bob Burgdorfer)

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