Brent, the global crude benchmark, was down 20 cents at $37.19 a barrel, trading less than $1 above its 2004 low.
West Texas Intermediate for January delivery, the front-month contract, was down 5 cents to $35.47 a barrel by 07.42 GMT after finishing down almost 5 percent on Wednesday. Analysts said such a move in the run up to year-end would be likely. “It is not advised to be long”.
United States crude stocks went up last week too since Gulf Coast imports went up and the data presented by the EIA on Wednesday surprised analysts who were expecting the inventories to fall. Crude stockpiles have expanded to 490.7 million barrels, the highest for this time of year since 1930, the Energy Information Administration reported.
Brent crude for February delivery, the front-month contract from Thursday, fell 12 cents to $37.27.
Another potential source of supply for worldwide markets, if not immediately, would be U.S. crude should lawmakers vote to lift a ban on exports as early as Friday.
“A lifting of the export ban could narrow the spread between WTI and Brent, by providing the global market with a substitute for oil from current main supplying regions”, said Sanjeev Gupta, head of the Asia-Pacific Oil and Gas practice at professional services organization EY. The premium was above $13 per barrel in March.
The US Fed raised interest rates for the first time in nearly 10 years this Wednesday since it believed that the country’s economy had overcome most of the calamity which had been caused by the financial crisis of 2007-2009.
Goldman Sachs said in a note it would take a steeper market drop to push OPEC into coordinated production cuts.
A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013.
The dollar hit a 2-week high against a basket of currencies, making oil and other commodities denominated in the greenback less affordable to users of the euro among others.
The world’s biggest oil producers in OPEC added to Thursday’s bearish sentiment, forecasting scant chance for a meaningful oil price rise in 2016.
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