Global stocks make modest gains as oil price stabilizes
Brent was down $1.21, or 3.2 percent, at $36.58 a barrel.
Similarly, the oil for delivery in February traded higher by Rs 9 or 0.37 per cent to Rs 2,540 per barrel in 147 lots.
“Oil prices will fluctuate between $35 and $50 per barrel in the coming years and there will be no worries regarding Iran’s oil income”, he said.
Crude prices slumped in early Asia trade Wednesday as fear of expanding crude inventories in the USA eroded earlier gains.
West Texas Intermediate (New York Mercantile Exchange: @CL.1) futures on Wednesday fell to $36.60 per barrel, down 3.4 percent.
The American Petroleum Institute, an industry group, on Tuesday reported a surprise build in USA stocks. “We no longer limit production”. Meanwhile, U.S. crude output has been resilient despite the low prices, and much of the excess has gone into storage.
On Monday, leading OPEC producer Saudi Arabia announced plans for spending cuts and non-oil revenue raising methods to manage a record state budget deficit while state-owned oil firm Saudi Aramco pumps away. USA oil stockpiles remain near levels not seen for this time of the year in around 80 years. The downturn has caused pain across the energy supply chain, including shippers, private oil drillers and oil-dependent countries from Venezuela and Russian Federation to the Middle East. Analysts estimate global crude production exceeds demand by anywhere between half a million and 2 million barrels every day. The contract is down 31 percent this year.
China’s blue-chip CSI300 index was down 0.2 percent, while the Shanghai Composite Index was flat, ahead of December manufacturing activity surveys in the coming days which are expected to show the economy remains sluggish.
S led to a global supply glut. Prices are down 16 percent this month, the biggest drop since July.
The Kingdom of Saudi Arabia owes its riches to oil. USA crude and Brent jumped 3 percent overnight, taking back the ground lost in the previous session as colder weather forecasts raised expectations of more demand. The Organization of the Petroleum Exporting Countries (OPEC) decided December 4 to keep crude production pumping at current level in the already oversupplied market.