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25 June 2024

Oil tumbles close to 13-year low


World oil prices tumbled once more Thursday, nearing a 13-year low in New York, with no end in sight to the global supply glut.

US benchmark West Texas Intermediate for delivery in March hit $26.32 a barrel, close to a 13-year low of under $26.

Around 1200 GMT, the contract stood at $26.38 a barrel, down $1.07 compared with Wednesday's close.

Brent North Sea crude for April shed 67 cents to $30.17 a barrel.

"This irrefutable damage caused by the excessive oversupply in the saturated markets may have nullified any bullish reports concerning a decline in stockpiles," said Lukman Otunuga, research analyst at trading group FXTM.

Oil prices had rallied briefly Wednesday after a US Department of Energy report showed US oil stocks fell about 800,000 barrels for the week ending February 5.

But they soon dropped back as traders took note of higher supplies of gasoline, a rise in stocks at the key Cushing, Oklahoma trading hub and a scant drop in oil production.

"Swollen crude inventories in the US are putting increased downward pressure on the price of WTI, increasing its differential to the international benchmark Brent," BMI Research said in a note to clients.

Analysts said sentiment was marred also by a report this week from the Organization of the Petroleum Exporting Countries that showed the cartel's production rose by about 130,000 barrels a day in January.

The Opec report followed a bearish outlook released by the International Energy Agency, which predicted the global oil surplus would be larger than previously expected in the first half of this year.

"With the fundamentals of an unrelenting oversupply still in place and the conflict of interest between Opec members pumping record high levels... low oil prices may be here to stay for an extended period," added Otunuga.