Breaking!! Nigeria Cant Find Buyers For Its Oil Oil dives 4.2%, hits new 5-year low on oversupply worry NEW YORK (MarketWatch) — Crude-oil prices again tumbled to five-year lows Monday, pressured by forecasts that a global glut of oil will persist into the first half of next year. On the New York Mercantile Exchange, crude futures for January delivery CLF5, +1.08% dropped $2.79, or 4.2%, to settle at $63.05 a barrel. The U.S. oil benchmark logged the lowest settlement for a front-month contract since July 16, 2009, sliding further just one session after ending at levels last seen on July 29, 2009. Meanwhile, January Brent crude on London’s ICE Futures exchange LCOF5, +0.76% dropped $2.88, or 4.2%, to settle at $66.19 a barrel. The European benchmark suffered the lowest settlement for a front-month contract since Sept. 29, 2009. Analysts are still largely bearish on oil prices. The latest reports on U.S. drilling and Japan’s economy were hitting sentiment on Monday, said Tim Evans, a Citi energy futures specialist. “Global petroleum markets are extending their price downtrend on a broadening recognition that there will be no quick rebalancing of the physical market after Friday’s Baker Hughes report showed an uptick in the U.S. drilling rig count, despite the falling price,” Evans said in a note Monday. “A downward revision to Japanese GDP and worries over slowing growth in China and the Euro Zone also weighed on market sentiment.” Chinese trade data missed market forecasts on Monday, with export growth falling to 4.7% in November, from an 11.6% rise in October, though China’s oil imports in November rose 7.9% from a year earlier to 25.41 million tons. Morgan Stanley, in a note dated Dec. 5, cut its forecast for average Brent crude price in 2015, seeing the price falling to as low $43 a barrel during the second quarter of next year. Without intervention by the Organization of the Petroleum Exporting Countries, “markets risk becoming unbalanced, with peak oversupply likely in 2Q15, “ said analysts Adam Longson and Elizabeth Volynsky in the note. “Prices are set up to fall in 1H15, but we do not see stress quite matching that of prior crises.” Different scenarios of tighter oil supply and stronger demand show that the first half of 2015 will see higher global oil stockpiles of 1.5 million to 2.0 million barrels a day, Harry Tchilinguirian, head of commodity markets at BNP Paribas, said in a report. He said there is a chance that the global oil balance can improve in the second half of next year under a best-case scenario. Check out: Oil just plunged to Great-Recession levels Physical markets also show an overhang of unsold Nigerian oil. Less than a third of January’s cargos have been sold with just two weeks left before February barrels become available, according to KBC Energy Economics. The surplus of West African crude is one indicator of Atlantic basin oil demand, and unsold cargos have weighed on Brent crude prices in 2014. Oil prices were already soft last week after Saudi Arabia cut prices for Asian and U.S. buyers, and then a strong U.S. jobs report on Friday strengthened the greenback, hammering oil prices further. A stronger dollar DXY, -0.43% makes it more expensive for most countries to buy oil, which is traded in dollars. Later this week, the U.S. Energy Information Administration, OPEC countries and the International Energy Agency will publish their monthly reports, giving more insight into global oil supply and demand. In other energy trading on Monday, Nymex reformulated gasoline blendstock for January RBF5, +0.73% — the benchmark gasoline contract — fell 6 cents, or more than 3%, to end at $1.71 a gallon.
Posted on: Tue, 09 Dec 2014 13:40:52 +0000