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Oil Trims 6th Weekly Decline as Collapse of 2014 Seen Excessive
By Heesu Lee Jan 2, 2015 12:22 PM ET
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Oil rose in New York, trimming a sixth weekly loss amid speculation that the biggest annual slide since the 2008 global financial crisis was excessive.
Futures climbed as much as 3.5 percent, bringing this week’s drop to 0.8 percent. Crude stockpiles in the U.S., the world’s biggest oil consumer, shrank by 1.8 million barrels last week, the Energy Information Administration reported, compared with a 900,000 barrel increase projected in a Bloomberg News survey. A manufacturing gauge in China fell to the lowest level in 18 months, government data showed yesterday.
Oil is trading near a five-year low after slumping 46 percent in 2014 as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share. OPEC pumped above its quota for a seventh month in December even as U.S. output expanded to the highest level in more than three decades.
“If we do see some supply-side responses, or even if they’re anticipated over the course of this first quarter of the year, we might find that oil has in fact bottomed,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “We’re now clearly in a consolidation zone and it’s not clear which way crude will break from the current levels.”
WTI for February delivery gained as much as $1.84 to $55.11 a barrel in electronic trading on the New York Mercantile Exchange and was at $54.28 at 9:21 a.m. Singapore time. The contract declined 85 cents to $53.27 on Dec. 31. Total volume was about 34 percent above the 100-day average.
Brent for February settlement advanced as much as $1.21, or 2.1 percent, to $58.54 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude slumped 48 percent last year. It traded at a premium of $4.03 to WTI.
To contact the reporter on this story: Heesu Lee in Seoul at [email protected]
To contact the editors responsible for this story: Pratish Narayanan at [email protected] Yee Kai Pin