Brent slips on Greece jitters, high U.S. oil stocks

Brent crude was down 50 cents to $ 112.23 a barrel by 0729 GMT, dropping for a sixth straight session, its longest losing streak since the middle of 2010. Brent settled at $ 112.73 on Tuesday, the lowest settlement for a front-month contract since Feb. 2.

U.S. crude was at $ 96.35, down 66 cents.

“The market became overly bearish very quickly and the momentum was a result of what happened in Europe,” said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.

“People are becoming too pessimistic about how they are going to resolve it and this sentiment will continue to be bearish for commodities.”

Leadership changes in France and Greece fanned worries that the political uncertainty could threaten austerity plans seen as key to tackling the euro zone debt crisis.

“There are some dates to be mindful of, including how Greece will handle the maturity of some debts on May 18,” Barratt said.

“There’s no good news out there to make oil go higher unless there’s some resolution out there.”

U.S. CRUDE STOCKS UP

Higher OPEC production and rising crude stockpiles globally also weighed on oil prices.

Investors are now eyeing U.S. government data later in the day to confirm industry statistics that showed a larger-than-expected rise in crude inventories, already at their highest level since 1990.

In the United States, the world’s largest oil consumer, domestic crude stocks jumped 7.8 million barrels in the week to May 4, according to industry group American Petroleum Institute. This is nearly four times the forecast in a Reuters poll of analysts.

“The total crude stocks already sit about 3 percent below all-time highs, so another build over 1.2 million barrels will likely be particularly bearish for prices,” ANZ analysts said in a note.

Saudi Oil Minister Ali al-Naimi reiterated on Wednesday that there was a surplus of oil in the market, following his earlier comments that the world’s top exporter is pumping around 10 million barrels per day and is storing 80 million barrels to meet any sudden disruption in supplies.

Higher production from Saudi Arabia has partly filled a supply gap caused by lower imports from sanctions-hit Iran. India has joined other Iranian crude buyers in Asia to cut back imports from the Islamic Republic.