Crude Oil Lower Ahead Of Fed Decision

Market surveys from Platts suggest that U.S. commercial crude oil inventory may have fallen by 2.5 MMbbls for the week ending December 11.

China, the world’s second-biggest oil consumer, said it will suspend fuel price cuts while crude continues to fall in order to slow consumption growth and trim automobile emissions. US crude (CLc1) was up 60 cents at $36.91.

To make things worse, Amir Hossein Zamaninia, the Iranian Deputy Oil Minister for worldwide and Commerce Affairs, said there’s “absolutely no chance” his country will delay plans to increase shipments even if crude prices drop.

Light, sweet crude for January delivery settled up $1.04, or 2.9%, to $37.35 a barrel on the New York Mercantile Exchange.

According to the agency, global oil supplies climbed past 97 million barrels per day in in October, as non-OPEC output recovered from lower levels in September.

On Monday, it came within 14 cents of snapping its December 2008 bottom of $36.20, unleashing a surge of buying support at those low levels.

Meanwhile, OPEC Secretary-General Abdullah al-Badri said prices could see a significant increase within a year in comments he made at the OPEC-India Energy Dialogue in New Delhi Tuesday.

The Fed’s widely expected decision to lift interest rates for the first time since 2006 also weighed, with the dollar ticking up against most rivals, making oil more expensive to customers using weaker currencies.

Oil fell on Wednesday on fresh evidence of growing global oversupply and as investors awaited the outcome of a U.S. Federal Reserve meeting where interest rates are likely to be raised, boosting the dollar and pressuring commodities.

Crude supplies rose to 490.7 million barrels, leaving stockpiles more than 120 million barrels above the five-year seasonal average, government data showed.

Factors supporting a more positive outlook range from higher auto sales to heightened security and political risks in some oil producers and debt-laden shale firms on their last legs. “Few month or a year or so, you will see this will change”.

Natural-gas prices, meanwhile, plunged to their lowest settlement since 2001 as warmer weather and hefty supplies sent prices tumbling.

OPEC expects global oil demand to grow by 1.25 million bpd in 2016 and non-OPEC supply to decline by about 400,000 bpd as the price collapse hurts rival producers, more than halving the supply glut compared to this year to about 900,000 bpd.