Thursday 28 Mar 2024
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HONG KONG (Dec 10): Oil edged higher from the lowest in more than six years as investors weighed the significance of the first decline in U.S. inventories in 11 weeks.

Futures rose as much as 1 percent in New York after closing 9.5 percent lower in the four days since OPEC’s Dec. 4 decision to effectively abandon its output target. U.S. stockpiles along the Gulf Coast fell the most since December 2012, according government data Wednesday. Refiners drain tanks to reduce their tax burden, which is determined by year-end levels, and nationwide supplies remain more than 120 million barrels above the five-year average.

Oil is trading near levels last seen during the global financial crisis as Saudi Arabia leads the Organization of Petroleum Exporting Countries in maintaining output and defending market share against higher-cost producers. Chevron will cut spending on exploration, drilling and other projects by almost a quarter next year in response to the price slump.

“It’s now a waiting game to see at these levels, sub-$40, if there is some form of rational response from the supply side,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “The market is fully aware of the inventory management by U.S. refiners.”

West Texas Intermediate for January delivery rose as much as 38 cents to $37.54 a barrel on the New York Mercantile Exchange and was at $37.45 at 9:36 a.m. in Hong Kong. The contract fell 0.9 percent to $37.16 on Wednesday, the lowest close since February 2009. The volume of all futures traded was about 45 percent below the 100-day average. Prices have lost 39 percent the past year.

Brent for January settlement was 30 cents higher at $40.41 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 0.4 percent to $40.11 Wednesday, also the lowest close since February 2009. The European benchmark crude traded at a premium of $2.95 to WTI.

 

 

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