SINGAPORE – Oil prices rebounded in Asia Wednesday, halting
a plunge that saw fall below $30 a barrel for the first time in more than 12
years but analysts warned of further pressure on the commodity.
Investors have an eye on the release later in the day of US
commercial crude stockpiles data, which is expected to show another increase,
further exacerbating a global supply glut that has hammered the market for 18
months.
US benchmark West Texas Intermediate (WTI) for delivery in
February rose 26 cents, or 0.85 percent, to $30.70 per barrel at around 0330
GMT. European benchmark Brent rose 10 cents, or 0.32 percent, to $30.96.
On Tuesday, WTI fell at one point to $29.93, a level last
seen in December 2003, although they were given a lift later by a private
report pointing to a drop in inventories. However, experts warned that prices
remained fragile.
“The supply and demand landscape for oil continues being
bearish as prices continue to take discounts,” Daniel Ang, an analyst with
Phillip Futures in Singapore said in a market commentary.
“US oil supply continues to remain strong despite reports of
US shale production being one of the higher end from a cost perspective.”
- Bernard Aw, a market strategist with IG Markets Singapore said, that if the market continues to test the $30 price level, “it is possible that the mark might eventually break”.
- He said the long-term trend is for prices to fall, with the supply glut not showing any let up.
- Oil-reliant OPEC member Nigeria on Tuesday called for an emergency meeting of the cartel to address collapsing prices, which have rattled world stock markets and hammered energy firms.
- The Nigerian petroleum resources minister, Emmanuel Ibe Kachikwu, said he expects an extraordinary meeting of the group in “early March” to discuss the crisis.
- “We did say that if it hits the $35 (per barrel level), we will begin to look (at)… an extraordinary meeting,” Kachikwu said at the Gulf Intelligence UAE Energy Forum.
- Poorer members of the Organization of the Petroleum Exporting Countries have been clamouring for the cartel to cut high production levels in a bid to drive prices higher.
But OPEC’s influential members led by Saudi Arabia have
rejected any such move, preferring to fight for market share against rival
producers, particularly the United States.
Crude accounts for 90 percent of Nigeria’s export earnings
and 70 percent of overall government revenue.
Source: – AFP
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