Business
Oil Ends Down More Than 2 Percent as U.S. Drilling Points to Glut
(AP Photo)
(Reuters) – U.S. oil prices traded below $40 a barrel for the first time since the 2009 financial crisis, ending 2 percent lower on Friday on signs of U.S. oversupply and weak Chinese manufacturing and notching the longest weekly losing streak in almost three decades.
U.S. crude dipped below the $40 threshold following weekly data that showed U.S. energy firms added two oil drilling rigs last week, the fifth increase in a row. The rise in the number of rigs emerging after a second quarter lull in prices is adding to concerns U.S. shale production is proving slow to respond to falling prices, prolonging a global glut. [RIG/U]
“Everyone is still looking at it saying ‘Wow, you still don’t have production coming down,'” said Tariq Zahir, founder at Tyche Capital in Laurel Hollow, New York.
U.S. October crude CLc1 settled 87 cents, or 2.1 percent, lower at $40.45 a barrel, having touched a new 6-1/2-year low of $39.86 a barrel. Front-month U.S. crude has fallen 33 percent over eight consecutive weeks of losses, the longest such losing streak since 1986.
