U.S. oil prices extended a sharp decline to the lowest in nearly four months on Tuesday, while European Brent held firm as signs of a near-term surplus in U.S. crude spurred heavy selling in the trans-Atlantic spread.
West Texas Intermediate (WTI) futures dropped below their 200-day moving average for the first time since June, while the closely watched Brent/WTI spread swelled by more than $1 for a third day running, hitting its widest mark since April 22 at more than $11 a barrel.
Recent data showing that crude stockpiles in Cushing, Oklahoma, were rising again after a 14-week decline helped trigger selling pressure in the U.S. contract. Meanwhile, tenuous relations between the United States and Saudi Arabia, the most important oil producer in the Middle East, also supported a geopolitical risk premium in Brent.
Brent crude for delivery in December added 20 cents to rise above $110 per barrel. U.S. crude for November delivery, which expired when trading ended, settled down $1.42 at $97.09, its weakest since June 28.
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