Oil below $45; US stockpiles may speed fall

MELBOURNE: Oil extended losses to trade below $45 a barrel amid speculation that US crude stockpiles will increase, exacerbating a global supply glut that's driven prices to the lowest in more than 5 and 12 years.

Futures fell as much as 4% in New York, declining for a third day. Crude inventories probably gained by 1.75 million barrels last week, a Bloomberg News survey showed before government data on Wednesday. The United Arab Emirates (UAE), a member of the Organisation of Petroleum Exporting Countries ( OPEC), will continue to expand output capacity, while shale drillers will probably be the first to curb production as prices fall, according to Energy Minister Suhail Al Mazrouei.

Oil slumped almost 50% last year, the most since the 2008 financial crisis, as the US pumped at the fastest rate in more than three decades and OPEC resisted calls to cut production. Goldman Sachs Group said that crude needs to drop to $40 a barrel to “re-bal ance“ the market, while Societe Gener ale SA also reduced its price forecasts.Oil Prices “Prices continue to freefall and there is little that can stop them,“ Amrita Sen, chief analyst at consultants Energy As pects in London, said in a report.

“OPEC remains the only factor that can stabilize markets in the short term. But with the group out of the picture, the market is looking elsewhere for a tangible reaction.“