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US Oil Settles Down 44 Cents, or 0.9%, at $46.66 a Barrel

US Oil Settles Down 44 Cents, or 0.9%, at $46.66 a Barrel

Oil prices slipped on Tuesday afternoon as investors focused on a bearish outlook from the International Energy Agency after U.S. crude gained on technical support earlier in the session.

Global benchmark Brent crude was down 30 cents a barrel at $49.50, while U.S. crude was flat at $47.10, paring early gains of over a dollar on technical trade.

The IEA said the world oil market would remain oversupplied for at least another year despite falls in output from non-OPEC producers.

"(Monday's) sharp drop lower is being deemed an overreaction," said energy analyst Tony Headrick of Minnesota-based commodity brokerage CHS Hedging. Oil fell 5 percent on Monday as traders took profits after last week's surge to an 11-week high.

Traders also noted a weaker U.S. dollar, which hit a three-week low earlier on Tuesday, added some support to the higher crude prices.

"(Monday's) sharp drop lower is being deemed an overreaction," said energy analyst Tony Headrick of Minnesota-based commodity brokerage CHS Hedging. Oil fell 5 percent on Monday as traders took profits after last week's surge to an 11-week high.

Traders also noted a weaker U.S. dollar, which hit a three-week low earlier on Tuesday, added some support to the higher crude prices.

"Both followed a period of price stability following a sharp decline. Both appear to be spurred on by unverifiable assumptions surrounding single data points. Both are driven by sentiment and financial flows rather than clear market fundamentals," Morse added.

Investors awaited data on U.S. oil inventories from the American Petroleum Institute (API) on Wednesday and the Energy Information Administration (EIA) on Thursday. Release of the data was delayed a day because of the U.S. Columbus Day holiday.

A Reuters survey estimated that U.S. crude stockpiles increased by 2.8 million barrels on average in the week ended Oct. 9.

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Copyright:
Reuters
Published on:
October 14, 2015
Source url:
http://uk.reuters.com/
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