Oil Prices Slide Down Half a Dollar Amid Slow Demand
Dec, 30th 02:23
Crude oil futures fell around half a dollar early on Wednesday as the market remained under pressure from slowing demand and high supplies, while forecasts that a cold snap in Europe and the United States would be short-lived also hurt prices.
Crude prices have plunged by two-thirds since mid-2014 as soaring output from the Organization of the Petroleum Exporting Countries, Russia and the United States led to a global surplus of between half a million and 2 million barrels per day.
More recently, a slowing demand outlook, especially in Asia but also Europe, has started dragging on prices.
Front-month U.S. West Texas Intermediate crude futures (CLc1) were trading at $37.18 per barrel at 0140 GMT, down 69 cents or 1.82 percent from their last settlement. Brent futures (LCOc1) were down 47 cents, or 1.24 percent, to $37.32 a barrel.
Traders said the price falls were largely a result of a weak outlook for next year and the closing of 2015 trade books.
Forecasts that an upcoming cold weather in Europe will only be short-lived could also hurt crude prices.
U.S. crude and Brent had both rallied about 3 percent in the previous session on hopes that a drop in temperatures would buoy demand for oil for heating purposes.
But weather data in Thomson Reuters Eikon shows that average continental European temperatures are expected to drop from around 5 degrees Celsius currently toward and slightly below the seasonal norm of 2.4 degrees by Jan. 3 before rising to as high as 6-8 degrees by Jan. 7.
For most of the United States, a brief cold period is also not expected to last for much more than a week.