Oil trades near five-year low as US raises pro­duc­tion

The China Post - - MARKETS -

Oil prices traded near five-year lows in thin year-end trade Tues­day, as an­a­lysts pre­dicted fur­ther bear­ish­ness in the mar­ket owing to ris­ing U.S. pro­duc­tion de­spite a global sup­ply glut.

West Texas In­ter­me­di­ate (WTI) for Fe­bru­ary de­liv­ery fell 49 cents to US$53.12 while Brent crude for Fe­bru­ary lost 55 cents to US$57.33 in af­ter­noon trade.

WTI closed down US$1.12 to US$53.61 in New York while Brent fell 57 cents 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 U.S. pro­duc­tion lev­els,” Michael McCarthy, chief mar­ket strate­gist at CMC Mar­kets in Syd­ney, told AFP.

“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, the OPEC oil-pro­duc­ing car­tel last month said it would main­tain out­put lev­els de­spite am­ple global sup­plies, in part due to cheaper oil ex­tracted from North Amer­i­can shale rock.

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 U.S. stock­piles.

The U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion will on Wed­nes­day re­lease stock­piles data for the week to Dec. 26.

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