NEW YORK: US crude oil futures bounced off five-and-a-half-year lows yesterday, and hovered around $55 a barrel in volatile trading near that price, with US options set to expire later in the day.
Global benchmark Brent crude also pared losses after plumbing a July 2009 low below $59, but remained stuck below $60 a barrel as major oil producers said they were in no rush to cut production and curb a growing glut. Front-month January Brent expires later in the day.
US West Texas Intermediate (WTI) futures were down 37 cents at $55.57 a barrel by 1838 GMT, off a May 2009 low of $53.60. Brent was down 91 cents at $60.15 after plumbing a July 2009 low of $58.50.
Meanwhile, Opec has no plans to intervene in the oil market to shore up sagging crude prices, the Kuwaiti oil minister said yesterday. “At Opec’s meeting in November, we took two decisions,” Ali Al Omair said at a lecture in Kuwait City. “The first was to keep the production ceiling unchanged and the second to hold the next meeting in June. So far, nothing has changed and there are no calls for holding an emergency meeting,” Omair said.
He declined to answer a question on what price would force the Organisation of Petroleum Exporting Countries to step in to bolster the market.
“As of now, there are no plans. We will talk about it when it comes,” the minister said in response to a question on whether Opec would meet if prices drop to $40 a barrel.
The Kuwaiti minister said the current slide in oil prices had “surpassed all forecasts”, which initially predicted a slight drop in crude prices.
He said excess supplies in global markets had increased from 1.2 million barrels per day when Opec met last month to 1.8 million bpd now. Oil prices were also under pressure because “many world markets are saturated” with oil.
The market was driven down earlier by Russia’s failed emergency rate hike to stabilise the rouble, an investor flight to safe-havens such as gold and the yen from troubled emerging market currencies and slowing industrial activity in China.
Russia’s decision not to cut its oil output, matching producer group Opec’s stance, also weighed on sentiment. Agencies
