Wednesday, 18 March 2015 02:22
NEW YORK: Oil prices fell Tuesday as traders expected a key US stockpiles report to show another increase to a new record high.
US benchmark West Texas Intermediate (WTI) for April delivery shed 42 cents, closing at $ 43.46 a barrel, a six-year low.
In London, Brent North Sea crude for May delivery, the global benchmark, fell 43 cents to $ 53.51 a barrel.
Earlier in the day WTI had fallen as low as $ 42.63 as traders braced for Wednesday’s Department of Energy petroleum inventories report.
The report is expected to show US crude stockpiles increased by 3.3 million barrels to 452.2 million barrels in the week ending March 13, according to a Bloomberg News survey. They have risen for nine weeks, hitting record after record as US oil production climbs, testing the limits of storage capacity.
“Growing concerns that US crude stockpiles would see additional builds this week pushed prices lower,” said Sucden analyst Kash Kamal.
World oil prices have collapsed by about 60 percent since last June on mounting US output and weak global economic growth.
“Oil prices remain in the long slide that began last summer, with OPEC’s shift to a more competitive policy as the key fundamental driver,” said Tim Evans of Citi Futures.
For Phil Flynn, of Price Futures Group, the oil market, like the equities and foreign exchange markets, were waiting for the outcome of the Federal Reserve’s two-day policy meeting Wednesday for clues about how soon the central bank will lift near-zero interest rates.
“The Fed has made oil go up with QE 1 and QE 2 and QE 3,” Flynn said in a research note, referring to its three rounds of quantitative easing stimulus. Now the Fed is “helping it go down as it threatens to raise rates while the rest of the globe is going in the other direction.”
But, he warned there was a chance for a demand surge that “could catch this market by surprise. The difference between a glut of oil and a tight market is a lot thinner than people think.”
Copyright AFP (Agence France-Presse), 2015
