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Oil slips on supply glut jitters

Oil slips on supply glut jittersLONDON: World oil prices slipped Thursday after tanking in the previous session on intensifying worries over global crude oversupply, dealers said.

In late afternoon deals in London, Brent North Sea crude for December shed three cents to stand at $ 48.55 per barrel.

US benchmark West Texas Intermediate for delivery in December dipped 33 cents to $ 45.99 per barrel compared with the previous day’s close.

“We have seen few signs recently indicating a change of tack in the oil markets,” said Natixis analyst Abhishek Deshpande, in reference to recent sharp losses.

“Global production continues to remain in excess of demand and OPEC have been continuing with their policy of maintaining output levels to protect market share.

“Based on our analysis, we maintain our view that oil prices will remain under pressure as long as the surplus remains in the market.”

Crude futures have plunged from peaks above $ 100 a barrel early last year owing to a stubborn global supply glut, slackening demand, record OPEC production and a strong US dollar.

Prices were hammered Wednesday after data showed that commercial crude inventories in the United States, the world’s top oil consumer, rose in the week to October 30.

US production also increased, further supporting forecasts that the crude supply glut which has weighed down oil prices for more than a year will persist well into 2016.

EY analyst Sanjeev Gupta said a strong dollar boosted by expectations of a US interest rate hike in December will hurt demand for commodities like oil priced in the US currency.

“A stronger US dollar will make crude more expensive for importing countries, thereby curtailing demand,” Gupta added.

Copyright AFP (Agence France-Presse), 2015

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