Brent crude oil breaks below $80 a barrel
U.S. crude stocks rose by 800,000 barrels last week: Reuters poll
Benchmark Brent crude slid below $80 a barrel on Wednesday, extending a freefall in oil prices that began earlier this year, after Saudi Arabia's Oil Minister said the kingdom will not engage in a price war.
Fears of a spike in U.S. crude stockpiles also weighed on oil markets. Inventory data due at 2130 GMT from industry group American Petroleum Institute could show a build of 800,000 barrels for the week ended Nov. 7, a Reuters poll showed. The U.S. government's Energy Information Administration will issue on Thursday official inventory data for last week.
The only supportive factor for oil was news that an attempt to restart Libya's largest oilfield, El Sharara, had been abandoned on Wednesday due to a blocked pipeline.
Brent's front-month contract held below $80 a barrel in post-settlement trade, after finishing down $1.29 at $80.38. The session bottom was $79.84, which marked a low since September 2010. Brent has tumbled 30 percent from a June high above $115 on worries of an oil glut.
The front-month in U.S. oil's West Texas Intermediate (WTI) crude traded below $77, after settling down 76 cents at $77.18. The session low was $76.63.
Brent and WTI were down from early trade but their losses accelerated late in the afternoon, coinciding with the dollar's rally to a 14-month high against the British pound. The dollar index has jumped 10 percent since June on bets of an earlier than originally expected U.S. interest rate hike.
Saudi Oil Minister Ali al-Naimi said during a visit to Mexico on Wednesday the kingdom wants stable oil markets and that talk of an oil price war was baseless.
More importantly, Naimi did not say if Saudi Arabia will support a cut in oil production at OPEC's meeting on Nov. 27, to shore up prices.
"Parsing his words sounds to me like the Saudis will not cut," said John Kilduff, partner at New York hedge fund Again Capital. "Holding on to their market position means more than anything else to Saudi Arabia now and that means holding on to their production."
Adding to the bearish sentiment, the Saudis, who are the No. 1 exporters of oil, said in OPEC's monthly report on Wednesday their output barely changed in October.
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