Oil prices near 18-month low ahead of new year

US crude inventories rose by 6.9 million barrels in the week to Dec. 21. (Shutterstock)
Updated 29 December 2018
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Oil prices near 18-month low ahead of new year

LONDON: Oil prices steadied on Friday after a week of volatile trading, shedding early gains on profit-taking ahead of the new year holiday as global crude benchmarks hovered near their lowest levels in more than a year.
Brent crude oil rose 15 cents to $52.31 a barrel, having earlier risen more than 3 percent. The futures contract had dropped 4.2 percent on Thursday.

US light crude was last up 44 cents at $45.05, after rising 3.6 percent in early trade.

Both benchmarks are set for their third straight week of losses.

Oil prices fell to their lowest in almost 18 months this week and are down more than 20 percent for the year, depressed by rising US supply and concern over global economic growth.

Traders appeared to be squaring their books ahead of expected light volumes on Monday and a market closure on Tuesday for the New Year’s Day holiday.

“Looks like some people in the US and UK got a nice opportunity to bail out of longs,” Sukrit Vijayakar, principal and trader at Trifecta Consultants in Mumbai, told the Reuters Global Oil Forum.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said that crude prices had been pressured by slowing economic growth “coupled with the expectation of strong US production in the new year.”

US crude inventories rose 6.9 million barrels to 448.2 million barrels in the week to Dec. 21, according to the American Petroleum Institute. 

The US has emerged as the world’s biggest crude producer this year, pumping 11.6 million barrels per day (bpd), more than both Saudi Arabia and Russia.

Russian Energy Minister Alexander Novak said on Thursday that Russia would cut its crude output by between 3 million and 5 million tons in the first half of 2019 as part of a deal between producers.

Earlier this month, the Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to cut output by 1.2 million bpd, or more than 1 percent of global consumption, starting in January.


Oil prices edge up as OPEC says its crude output fell sharply in December

Updated 43 min 16 sec ago
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Oil prices edge up as OPEC says its crude output fell sharply in December

  • OPEC cut oil output sharply in December before a new accord to limit supply took effect on Jan. 1

SYDNEY, Australia: US oil prices inched higher on Friday after a report from the Organization of the Petroleum Exporting Countries showed its production fell sharply last month, easing fears about prolonged oversupply.
US West Texas Intermediate (WTI) crude futures were at $52.40 per barrel at 0026 GMT, up 32 cents, or 0.6 percent, from their last settlement. WTI futures closed down 0.4 percent on Thursday.
International Brent crude oil futures had yet to trade, after closing up 1.1 percent in the previous session.
OPEC cut oil output sharply in December before a new accord to limit supply took effect on Jan. 1, it said on Thursday, suggesting that producers have made a strong start to averting a glut in 2019 as a slowing economy curbs demand.
“The OPEC+ production cuts (that stared this month) will be paramount to keeping the market tight and supporting prices,” ANZ said in a research note. The body is making cuts along with other major producers such as Russia.
OPEC said in its monthly report that its oil output fell by 751,000 barrels per day (bpd) in December to 31.58 million bpd, the biggest month-on-month drop in almost two years.
But tempering that support for prices, OPEC also cut its forecast for average daily demand for its crude in 2019 to 30.83 million barrels, down 910,000 bpd from the 2018 average.