Oil prices fall again on US data

28/01/2016 05:51 AST

Oil prices resumed their slide Wednesday as traders awaited US energy stockpiles data expected to once more shine light on the global crude glut.

At about 1100 GMT US benchmark West Texas Intermediate for March delivery was down $1.03 at $30.42 a barrel.

Brent North Sea crude for March shed 66 cents to $31.14 compared with Tuesday’s close. The US Department of Energy publishes its weekly inventory of commercial crude stockpiles on Wednesday — data that could add to persistent concerns about an oversupply of world oil.

The market was awaiting also the outcome of a meeting of the Federal Reserve on the timing of another rise in US interest rates.

Oil had soared late last week from 12-year lows on hopes of fresh economic stimulus by the European and Japanese central banks. However, continuing worries about a supply glut, weak demand and the slowing global economy returned to the fore.

Oil rallied again Tuesday though on talk of possible coordination between OPEC kingpin Saudi Arabia and non-OPEC crude producer Russia to cut petroleum output. That followed remarks Monday from OPEC Secretary General Abdullah El-Badri calling on producers within and outside the organization to work together to boost prices.

The world remains awash with oil supplies, a situation that has been fuelled by OPEC’s refusal to curb crude output to squeeze out US shale producers.

The Saudi-backed strategy is aimed also at pressuring Russia — the biggest global oil producer –and force fellow OPEC member Iran to trim output.

Prices have suffered a rapid descent this month – building on a slump stretching back to mid-2014 – on snowballing concerns over the strong dollar and weak crude demand growth across the faltering world economy – particularly in top energy user China.

Saudi Gazette