OIL PRICES REBOUND AFTER FALLING BELOW $30
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
OIL PRICES DOWN IN ASIAN TRADE
Oil prices fell in Asia Friday
after the OPEC oil cartel slashed its longer-term global demand outlook,
while a stronger dollar also weighed, analysts said.
The
benchmark US futures contract, West Texas Intermediate for December
delivery, dropped 36 cents to $77.55 while Brent crude for December
eased 52 cents to $82.34 in afternoon trade.
The
Organization of the Petroleum Exporting Countries estimated in its
annual world outlook Thursday that demand for its crude will fall from
just above 30 million barrels per day in 2013 to 28.2 million in 2017,
before starting to rise again.
The 12-nation group said the United
States and Canada are the primary drivers of non-OPEC output growth, in
part due to shale-oil production.
Singapore's United Overseas
Bank said "US and global crude prices resumed its decline" after the
release of the report, adding to heavy losses earlier this week owing to
price cuts by Saudi Arabia.
Prices were also under pressure from the stronger US dollar.
The
US dollar bought 115.31 yen in late-morning Asian trade, from 115.16
yen in New York Thursday afternoon. The greenback has surged against the
yen since last Friday, when the Bank of Japan ramped up its stimulus
programme.
A stronger greenback makes dollar-priced commodities
like oil more expensive for buyers using weaker currencies, which in
turn tends to hit demand and prices.
Investors are also keeping an
eye on the release of October non-farm payrolls data Friday that is
expected to paint an optimistic picture of the US economy.
Initial
jobless claims fell 10,000 to to 278,000 in the week ending November 1,
the lowest level in 14 years, the US Labor Department said Thursday.
"The
very positive weekly jobless claims data reinforced expectations for a
potentially strong US October jobs report today which could bring
forward rate hike expectations," UOB said.
Source: AFP
