Tuesday news: there were some gains and losses of US crude oil futures prior to the release of the weekly inventory data of US oil. This happened after coming against the multi-annual lows on the concerns of oversupply.
Light, sweet crude futures are set for delivery in Feb CLG5, +0.13% on the NY Mercantile Exchange, trading up 0.1% or 7 cents at $53.68.
Brent crude in Feb on LCOG5 London ICE Futures exchange turned a brief -0.47% higher, but returning back to the red. There was a 0.3% or15 cent decrease in Futures to $57.74 a barrel.
The American Petroleum Institute later on Tuesday is scheduled for the publishing of its weekly US oil inventory data. On Wednesday, the US Energy Information Administration data is scheduled. There is a 1.25 million barrels decline expected to happen for the week ending December 26 according to the analysts polled by Platts.
Because of the strong winter demand, there is usually a decline in oil inventories around this time of year and because of high production levels and a build in stockpiles, oil prices will be pushed even lower according to traders.
Even though oil prices seem to continue to decline, chief market Ava Trade analyst, Naeem Aslam, states we are close to finding the bottom since the US reports a halt in the number of rigs which reduces supply and balances the demand. Trading oil is available at most binary options trading sites.
According to Baker Huges Inc., an oil field services corporation, amid low crude prices of US oil producers continues to scale back since the 37 count fall last week of the onshore drilling rigs. In fact, this is the 3rd week consecutively that the count of the drilling rig fell and is one of the largest since the tumble of crude oil prices in June. However, it will take a few months for how fast the spending cuts turn into a lowered oil production and is anticipated to be a gradual process.
Nymex crude was at its undermost value on Monday since May 1, 2009. Since its $107.26 52 week high in June, it has dropped 50%. In fact, this was the fastest 50% drop since 2008 for the Nymex crude front month contract. Within a 30 year span, it has dropped faster in 2 other periods which was in 1985 through 1986 and another from 1990 through 1991.
Since May 15, 2009, Brent crude was at its undermost. This new low pushes back the hope for more durable price support and according to Citi Future’s analyst Tim Evans; the market still is challenged by a surplus of 1.5 million barrels daily in the beginning months of 2015.