Oil prices traded near five-year lows in thin year-end trade yesterday, as analysts predicted further bearishness in the market owing to rising US production despite a global supply glut.
West Texas Intermediate crude for February delivery fell US$0.49 to US$53.12, while Brent crude for February lost US$0.55 to US$57.33 in afternoon trade.
WTI closed down US$1.12 to US$53.61 in New York trading, while Brent fell US$0.57 in London to US$57.88. Both contracts last traded at those levels in May 2009.
“We are seeing light volumes in Asian trading... Oil prices have once again touched new lows over longer-term concerns about US production levels,” CMC Markets chief market strategist Michael McCarthy said in Sydney.
“Bullishness is contained, and I think we will be seeing a consolidation pattern as we head to the close of the year,” he added.
Oil has shed about half its value since June, attributed to slowing growth in China and emerging-market economies, a recession in Japan and a near-stall in the eurozone.
On top of that, OPEC last month said it would maintain output levels despite ample global supplies, in part due to cheaper oil extracted from North American shale deposits.
Analysts said traders were also girding for more downward pressure stirred up by the impact of a brewing Greek political crisis, expected poor numbers on China’s industrial sector and another possible increase in US stockpiles.
The US Energy Information Administration on Wednesday is expected to release stockpiles data for the week to Friday last week.
US crude inventories have risen to almost 13 percent above the five-year average level of 343.1 million barrels for this time of year, the administration has said. Supplies were probably unchanged in the seven days ended on Friday last week, based on the median estimate in the Bloomberg survey of seven analysts before the administration’s report. Stockpiles climbed 7.3 million barrels the prior week.
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