Oil posts largest daily fall in 2013
Investors take profit on Brent crude as speculators have almost doubled their bets on an oil price rise since mid-December.
Oil extended losses for a second session this morning, with Brent slipping toward $115 (€86.75) a barrel after market rumours that a hedge fund was forced to liquidate substantial commodity positions led to the fuel's largest daily fall in 2013 yesterday.
Traders continued to liquidate long positions on today as oil prices fell below support levels on technical charts, triggering more sell orders.
Bearish news of a potential rise in Saudi Arabia's oil output and a possible slowdown in the bond-buying programme of the US Federal Reserve also gave investors a chance to take profit from a Brent bull run that has lasted nearly three months, traders said.
Brent crude fell as low as $114.95 and was down 58 cents at $115.02 a barrel in early morning trade. The contract is trading at its lowest in more than two weeks after settling down almost $2 yesterday.
US crude futures for April slipped 78 cents to $94.44 after closing at their lowest in over a month.
Hedge funds and other large speculators have nearly doubled their bets that oil prices will rise since mid-December, and have amassed positions in Brent and US crude oil futures and options equivalent to around 440 million barrels of oil, regulatory and exchange data shows.
Global equities also slipped on Wednesday after minutes from a Federal Reserve policy meeting last month showed some officials think the central bank might have to slow or stop buying bonds before seeing the pickup in hiring the programme is designed to deliver.
The world's top oil exporter, Saudi Arabia, could raise its oil output in the second quarter to satisfy higher demand from China and feed economic recovery elsewhere, oil industry sources said.