Oil Futures Down on Supply Glut and Global Growth Concerns

Crude oil futures shed more than a dollar on 10 October amid rising supplies and forecasts for weak global economic growth.

Brent November contract was trading $1.21, or 1.34%, lower to $88.84 a barrel at 0944 BST.

US November contract was trading $1.61, or 1.88%, lower to $84.16 a barrel.

US oil inventories have been bolstered by the shale revolution in the world's leading oil consumer.

American crude stockpiles have risen against a backdrop of slowing growth in China, the world's second-largest economy and its No. 2 oil consumer.

Analyst Take

RBC Capital Markets said in a note to clients: "Our deflation analysis begins with crude oil markets and the outlook for West Texas Intermediate (WTI) and Brent. We note that WTI is testing a key 5-year support trendline at 88.67 on the weekly chart.

"A weekly close below this level would trigger a bearish long-term trend reversal that would target the 2014 low at 84.30 and the 2013 low at 80.41 on the downside, thereby adding to deflationary risks."

"Resistance is located at 89.78 and 94.50, with a close above 101.55 required to trigger a bullish breakout from the triangle pattern. Brent has undergone a sharp move lower after posting a bearish trend reversal below a 4-year support trendline at 110.12 in July.

"A weekly close below the 2013 low at 91.01 would add to bearish sentiment, targeting 87.02 and 80.20 ahead of key long-term support at 75.64 (a 5-year trendline). This scenario would also add to deflationary risk, with resistance located at 97.69 and 104.88," RBC added.

Brent dropped to $88.42 on 9 October, its lowest intraday level since December 2010.

WTI dropped to $84.06 on 9 October, its weakest since November 2012, Reuters reported.