Brittany Sowacke | Bloomberg | Getty Images
A worker prepares to lift drills by pulley to the main floor of a drilling rig in the Permian basin.
Oil prices struck a new 2017 low on Thursday as mixed U.S. stockpile data compounded bearishness that has permeated the energy complex in recent weeks.
U.S. West Texas Intermediate crude fell below $47 and international benchmark Brent breached $50, both sinking to the lowest level since Nov. 30, the day the Organization of the Petroleum Exporting Countries agreed to cut output. Analysts said WTI could eventually decline to $42 now that it broke this key level.
U.S. West Texas Intermediate 2-day performance
The move lower came after the U.S. Energy Information Administration reported a much smaller-than-expected drop in crude oil inventories and another week of soft gasoline demand.
John Kilduff, founding partner at energy hedge fund Again Capital, said there was no one headline moving oil on Thursday. Instead, he chalked it up to more technical trading.
“That $47 level … is huge,” he said.
On Tuesday, oil breached the previous week’s low of $48.20, sparking a round of high-volume, late-afternoon selling.
There is some support around the $45 level, Kilduff said. But if U.S. crude settles below $47 a barrel on Thursday, he believes the contract could plunge to the November lows of $42 a barrel.
Seaport Global Securities also put the next major support zone at $45.90, with another critical level at $42.70.
Roberto Friedlander, head of energy trading at Seaport Global Securities, pointed to “terrible” demand for refined products, uncertainty around future oil consumption and “what seems like an endless supply of oil.”
