Wall Street Journal:
Oil prices extended losses Thursday to hit a three-month low after higher-than-expected buildup in U.S. crude inventories raised doubts over whether OPEC cuts will be enough to sap brimming stores of oil around the world.
Two days of a sharp selloff have broken the calmest period for oil prices in more than two years. Oil had been trading in a $4 range for about three months until Wednesday.
Traders had posted a record number of bets that they would move higher. Now investors are unwinding that crowded trade, spurred to close out some of their bullish bets because stockpile increases grew last week just about the time many expected them to end, brokers and analysts said.
“When you look at a very visible marker like the weekly U.S. inventories and you see that crude stocks are still rising, then some of these market participants may begin losing a bit of faith in the effectiveness of producer restraint,” said Harry Tchilinguirian, head of commodity strategy at BNP Paribas SA.