Oil close to 13-year low as glut per­sists

The Pak Banker - - MARKETS/SPORTS -

World oil prices tum­bled once more Thurs­day, near­ing a 13-year low in New York, with no end in sight to the global sup­ply glut.

US bench­mark West Texas In­ter­me­di­ate for de­liv­ery in March hit $26.32 a bar­rel, close to a 13-year low of un­der $26. Around 1200 GMT, the con­tract stood at $26.38 a bar­rel, down $1.07 com­pared with Wed­nes­day's close.

Brent North Sea crude for April shed 67 cents to $30.17 a bar­rel.

"This ir­refutable dam­age caused by the ex­ces­sive over­sup­ply in the sat­u­rated mar­kets may have nul­li­fied any bullish re­ports con­cern­ing a de­cline in stock­piles," said Luk­man Otunuga, re­search an­a­lyst at trad­ing group FXTM.

Oil prices had ral­lied briefly Wed­nes­day af­ter a US Depart­ment of En­ergy re­port showed US oil stocks fell about 800,000 bar­rels for the week end­ing Feb 5. But they soon dropped back as traders took note of higher sup­plies of gaso­line, a rise in stocks at the key Cush­ing, Ok­la­homa trad­ing hub and a scant drop in oil pro­duc­tion.

"Swollen crude in­ven­to­ries in the US are putting in­creased down­ward pres­sure on the price of WTI, in­creas­ing its dif­fer­en­tial to the in­ter­na­tional bench­mark Brent," BMI Re­search said in a note to clients. An­a­lysts said sen­ti­ment was marred also by a re­port this week from the Or­gan­i­sa­tion of the Pe­tro­leum Ex­port­ing Coun­tries that showed the car­tel's pro­duc­tion rose by about 130,000 bar­rels a day in Jan­uary.

The OPEC re­port fol­lowed a bear­ish out­look re­leased by the In­ter­na­tional En­ergy Agency, which pre­dicted the global oil sur­plus would be larger than pre­vi­ously ex­pected in the first half of this year.

"With the fun­da­men­tals of an un­re­lent­ing over­sup­ply still in place and the con­flict of in­ter­est be­tween OPEC mem­bers pump­ing record high lev­els... low oil prices may be here to stay for an ex­tended pe­riod," added Otunuga.

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