Oil Slides With Metals on Demand Concern While Stockpiles Rise

Oil slid for a third day as copper and other metals tumbled on concerns the Turkish crisis will spill over into emerging markets, and as an industry report was said to show a gain in U.S. crude inventories.

Futures in New York dropped as much as 1.5 percent. Copper slumped to the lowest in a year while nickel and zinc also retreated on fears that Turkey’s currency plunge will spread to other markets, unnerving investors already rattled by a trade dispute between the U.S. and China.

“There is definitely a very visible relationship between the fluctuations in global growth, copper prices and crude-oil prices,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “There are many reasons to be bullish both crude and copper down the road, but right here and now the arrow seems to point lower.”

Crude has slid further below $70 a barrel this month as a heightening trade conflict between China and the U.S. and deepening financial turmoil in Turkey raise concerns over global energy demand. That comes just as the Organization of Petroleum Exporting Countries and its allies restore production following an 18-month effort to clear a glut.

West Texas Intermediate crude for September delivery lost as much as $1.02 to $66.02 a barrel on the New York Mercantile Exchange, and traded at $66.47 as of 12:56 p.m. London time. The contract fell 0.2 percent on Tuesday. Total volume traded Wednesday was about 25 percent below the 100-day average.

Brent for October settlement fell 45 cents to $72.01 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.20 premium to WTI for the same month. The global benchmark crude dropped 0.2 percent on Tuesday.

U.S. crude inventories rose by 3.66 million barrels last week, the American Petroleum Institute was said to report. That compares with a 2.5 million-barrel decline forecast in a Bloomberg survey before government data due later on Wednesday.

Both nationwide stockpiles and supplies in the key storage hub of Cushing, Oklahoma, increased last week, the API was said to report. A 1.64 million-barrel build at Cushing would be the largest since March if confirmed by the Energy Information Administration’s data on Wednesday. A gain of 500,000 barrels was predicted in the Bloomberg survey, after a 12th week of drainage.

Other oil-market news:

Libya, holder of Africa’s biggest crude reserves, is said to be pumping more than 1 million barrels a day, about 40 to 50 percent above mid-July production, after its largest field restored normal operations. Diamondback Energy Inc. agreed to buy Energen Corp. in an $8.4 billion all-stock deal, the latest in more than $20 billion in acquisitions over the last month in the booming U.S. shale industry. Gunvor Group Ltd. is restructuring to cut costs as the energy trader contends with few opportunities in oil markets, according to people familiar with the matter. Gasoline futures decreased 0.6 percent in New York on Wednesday after a 1 percent gain on Tuesday.