Oil Rout Continues as WTI Crashes Below $30

The US benchmark, West Texas Intermediate (WTI) for March delivery, fell $1.74 (5.5 percent) to end at $29.88 a barrel on the New York Mercantile Exchange. It was the first time WTI closed below $30 since January 21, AFP reported.

In London, Brent North Sea crude for April delivery, lost $1.52 (4.4 percent) to settle at $32.72 a barrel compared with Monday's close.

There are "indications pointing towards a pretty hefty build" tomorrow, said Matt Smith of Clipper Data, referring to the US Department of Energy's weekly report due Wednesday.

Traders are expecting more bearish news on US crude stockpiles, while the prospect of coordinated action between Russia and the Organization of the Petroleum Exporting Countries (OPEC) to cut output has faded.

Last week, "OPEC and Russian officials hinted at the possibility of coordinated production cuts, which helped boost crude prices above $34 per barrel," said Robbie Fraser of Schneider Electric.

However, "this week's trading has seen crude futures prices move decidedly lower, as the reality of the challenges facing any Russia/OPEC effort to buoy prices has become clearer."

Russia on Tuesday announced that it pumped crude and condensate at a post-Soviet record high in January of around 10.9 million barrels per day, as it strives to defend its market share.

Adding to pressure on the market is a bleak outlook for global demand.

Weak economic data from China and the US has pressured prices, as manufacturing sectors in two of the top oil consuming nations contract, fanning concerns about demand, Commerzbank said in a client note. (Uu.A026)

Editor: B Kunto Wibisono

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