By Barani Krishnan
The trade in oil is getting scarier for the bulls, with the market sliding more than 1% on Halloween Thursday as investors continued to feel the tremors of data from the previous data showing an unexpectedly large weekly crude build.
“It’s close to midnight, and something’s selling oil in the dark,” Price Futures Group analyst Phil Flynn said in a Halloween parody of Michael Jackson’s “Thriller” as crude prices sank for a fourth day in a row.
West Texas Intermediate, the benchmark for New York-traded crude, was down $1.04, or 1.9%, at $54.02 per barrel by 1:05 PM ET (17:02 GMT), extending Wednesday’s 0.86% drop.
Brent, the London-traded global gauge for oil, slid by 79 cents, or 1.3%, to $59.45 after settling down almost 1% in the previous session.
U.S. crude stockpiles rose by 5.7 million barrels for the week ended Oct. 25, the EIA said on Wednesday. The market was looking for a rise of about 494,000 barrels, according to forecasts compiled by .
U.S. GDP growth, meanwhile, dropped to an annual rate of 1.9% in the third quarter. While that was above Wall Street expectations it still raised concerns about investment and growth ahead as the stimulus from tax cuts disappears.
Analysts said the combined headlines on the outsize inventory build and a softer economic landing pushed algorithmic trading models into stop-loss selling, forcing discretion-based traders to follow suit with little room to consider longer-term fundamentals.
Indeed, as Flynn wrote in his parody: “Under the moonlight, you see a drop that almost Stops Your Stop. You Try to Scream, but the computer takes the trade before you change It. You Start to scream, as oil tanks right before your eyes. You’re Paralyzed!.”
Thursday’s slide came as Bloomberg News reported that Chinese officials were casting doubts about reaching a comprehensive long-term trade deal with the United States, even as the two sides get close to signing a “phase one” agreement.
In private conversations with visitors to Beijing and other interlocutors in recent weeks, Chinese officials have warned they won’t budge on the thorniest issues, people familiar with the matter told Bloomberg.
“They remain concerned about President Donald Trump’s impulsive nature and the risk he may back out of even the limited deal both sides say they want to sign in the coming weeks,” the report said.
