Wednesday, 19 December 2018 21:06 WIB |
Oil markets stopped the blood-letting with stable trading Wednesday after a plunge a day earlier pushed the U.S. benchmark down some 7% to its lowest finish in nearly 16 months.
Continued market tensions over a potential global supply glut rattled traders Tuesday after market analysts noted reports that Russia was increasing its output to 11.42 million barrels a day this month. That raised some speculation that major players may advance their own interests even as members of the Organization of the Petroleum Exporting Countries and nonmember allies agreed earlier this month to cut production by 1.2 million barrels a day. That change is scheduled to go into effect in January.
Additionally on the supply front, the American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 3.5 million barrels for the week ended Dec. 14, according to sources.
The report contradicted what some surveys expect within government-issued U.S. data due later Wednesday. U.S. crude stockpiles are expected to have fallen last week in data expected from the U.S. Energy Information Administration. Crude inventories dropped by an average of 3.1 million barrels in the week ended Dec. 14, according to a survey of analyst and traders conducted by The Wall Street Journal. On average, analysts surveyed by S&P Global Platts expect the EIA to report a decline of 3 million barrels in crude supplies. If confirmed by the EIA today, the data could help to support prices, analysts say.
Against this backdrop, January West Texas Intermediate crude was up 31 cents, or 0.7%, at $46.55 a barrel. The contract settled at $46.24 a barrel on the New York Mercantile Exchange Tuesday, the lowest finish for a front-month contract since August 30, 2017, according to Dow Jones Market Data. The January futures contract expires at Wednesday™s settlement.
Meanwhile, February Brent the global benchmark, recovered some 13 cents, or 0.2%, at $56.39 a barrel. It tumbled 5.6% to $56.26 Tuesday on ICE Futures Europe, for the lowest finish since October 12, 2017.
The Tuesday declines extended a price rout that has seen Brent lose nearly 35% and WTI nearly 40% since reaching four-year highs at the start of October.
Source : Marketwatch