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US oil settles down $1.01, or 2.42%, at $40.74 a barrel

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Oil fell over 2 percent on Friday, extending the week’s loss to the largest in eight months, pressured by swelling storage of crude on both land and sea.

U.S. crude traded slightly above $40 a barrel while benchmark Brent was less than $2 from setting new 6½-year lows. The slump widened to oil products with U.S. gasoline tumbling to 10-month lows.

Oil prices have fallen in seven of the last eight sessions, with losses accelerating after U.S. government data on Thursday affirmed a seventh weekly rise in U.S. crude inventories that took stockpiles near April’s record highs.

The International Energy Agency (IEA) added to the bearish sentiment on Friday, saying there was a record 3 billion barrels of crude and oil products in tanks worldwide.

Options trading has spiked with a soaring number of options taken to sell crude if prices fall to $40 or even $25.

An estimated crude oversupply of between 0.7 million and 2.5 million barrels per day has resulted in prices dropping almost two thirds since June 2014.

The IEA said a mild 2016 winter could cause the overhang to rise in coming months.

Tens of millions of barrels are sitting on tankers at sea, looking for buyers and threatening logistical paralysis.

— CNBC’s Tom DiChristopher contributed to this report.

FULL ARTICLE Published 13 November 2015

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