Stock market turmoil extends to crude prices

Stock market turmoil extends to crude prices

Exports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in November.

Chinese crude oil imports will continue to grow over the next few years as the use of oil products grow along with the economic and refinery capacity expansion, analysts say.

At the same time, traders were gearing up for data on U.S. stockpile changes from the industry-funded American Petroleum Institute that will be released later.

Carsten Fritsch at Commerzbank said that "given the magnitude of the stock market selloff the oil drop is still rather moderate and not far away from any kind of panic - we can likely expect it to fall further". Even as the Organization of Petroleum Exporting Countries and its partners including Russian Federation work to reduce output, American shale drillers remain a persistent threat.

With West Texas Intermediate crude holding above $60 a barrel since late past year, the prospect of pumping in this price environment is seen enticing drillers to pick up the pace.

Meanwhile, U.S. crude oil imports have been lower than 8.5 million bpd in each month since 2013 when the shale revolution was in its first period of expansion, compared to more than 10 million bpd in monthly imports in numerous years of the 2000s.

Brent for April settlement slid 76 cents to end the session at US$66.86 on the London-based ICE Futures Europe exchange, the lowest since early January. The US Federal Reserve followed the wages data with indications that it would accelerate its interest rate hike schedule to control increasing inflation, leading to a market sell-off on Monday, with markets around the world tracking the fall in the Dow Jones index.

Financial markets went into a tailspin on Monday after a sharp rise in U.S. bond yields that raised alarms over rising inflation and potentially higher interest rates. "Markets tend to move in lockstep".

In the U.S., stored supplies probably increased by 3.15 million barrels a day last week, according to a Bloomberg survey ahead of government data scheduled to be released today. S. crude futures were trading 37 cents lower at $63.78.

BP Plc dodged the disappointment that afflicted other oil-company earnings by doing a better job of exploiting the upswing in crude prices.