 Crude oil slips below the $43 mark
(China Daily)
Updated: 2008-12-23 07:52
Oil fell below $43 a barrel yesterday, giving up earlier gains which were partly inspired by a weak US dollar and comments from Saudi Arabia that OPEC supply cuts will succeed in stabilizing the market. The January US crude oil futures contract expired on Friday after touching a low of $32.40, the lowest since February 2004, depressed by high levels of stocks at Cushing, Oklahoma, the delivery point for New York crude futures. February, which has taken over from January as the prompt month, fell 23 cents to $42.13 a barrel by 1007 GMT, after climbing to as high as $43.44 earlier in the session. London Brent crude was 32 cents lower at $43.68 a barrel. Brent is showing around a $1.50 a barrel premium to US crude, in a reversal of the more common market structure - US crude at a premium to Brent. "With Brent, it seems increasingly likely we've seen the lowest point of a downward move," said Christopher Bellew, of Bache Commodities Limited. "A lot of bearish economic data is now well priced in," he said. Oil prices have fallen more than $100 from their peak of above $147 in July as the global economic crisis has slashed demand for oil. The Organization of the Petroleum Exporting Countries last week cut output by 2.2 million barrels per day, on top of an earlier cut of 2 million bpd to balance supply and demand and put a floor under prices. But this has yet to stem the oil price slide. The world's largest exporter, Saudi Arabia, has tried to quell doubts about OPEC's ability to stick to its new supply limits. "Don't doubt the efforts of OPEC or its members to return the oil market to stability," Saudi Oil Minister Ali al-Naimi told reporters at the weekend. But Asian refiners have yet to receive notice from OPEC's core Gulf members of any further reductions to oil supplies since the group announced cuts last week. The US dollar fell against the euro yesterday, giving up some of its gains made after the US government offered a lifeline to US carmakers. In OPEC-member Nigeria, where production has been hindered for years by repeated militant attacks, gunmen in speedboats attacked three oil services ships and kidnapped at least two Russians in separate incidents in the Niger Delta, sources said on Saturday. Agencies (China Daily 12/23/2008 page17) |
