Oil prices plunged to a two-week low as an emerging-market stock index fell into bear market territory.
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Futures in New York slid as much as 2.3% on Thursday. Emerging-market stocks fell for a seventh day, bringing losses 20% below a recent high to meet the common definition of a bear market.
Meanwhile, the Energy Information Administration reported that U.S. distillate supplies rose for five out of six weeks, gasoline stockpiles increased and inventories held at the key Cushing, Oklahoma storage hub expanded last week.
"Bear market territory or not, there is some weakness there," said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise. Investors are focusing on "what that might mean in the future for global oil demand. It's just a risk-off day."
Sanctions Loom Over Oil Prices
Aside from the emerging-market scare, traders are focused on U.S.-imposed sanctions on Iran. As the early-November deadline set by the U.S. on Iran's exports nears, JXTG Holdings Inc., Japan's biggest refiner, and domestic rival Idemitsu Kosan Co. are both said to have skipped purchases of Iranian supplies loading in October.
West Texas Intermediate for October delivery slid $1.45 to $67.27 a barrel at 12:16 p.m. on the New York Mercantile Exchange. Total volume traded was about 17% below the 100-day average.
Brent for November settlement fell $1.31 to $75.96 a barrel on the ICE Futures Europe exchange. The global benchmark crude traded at a $8.97 premium to WTI for the same month.
The EIA reported gasoline supplies rose 1.85 million barrels last week, while distillate stocks rose 3.12 million. Cushing stockpiles increased 549,000 barrels, overshadowing a decline in crude inventories of 4.3 million.
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The post Crude Sinks As Emerging-Market Tumult Leads To Risk-Off Mood appeared first on Investor's Business Daily.
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