USA oil rises for first time in eight days after stocks fall

Banking and financial services company Standard Charter said Tuesday, “we think prices could fall as low as $10 a barrel before most of the money managers in the market conceded that matters had gone too far”.

Fereidun Fesharaki, the Iranian chairman of Facts Global Energy (FGE), recently said oil prices could further fall to $25 a barrel by March as Iran is expected to begin increasing its oil production soon, following the lifting of worldwide sanctions.

NYMEX WTI crude futures for February delivery had traded at $29.93/bbl, the lowest level since December 2003, before recovering slightly to close on Tuesday at $30.44/bbl, down 97 cents.

China imported a record amount of crude a year ago as oil’s lowest annual average price in more than a decade spurred stockpiling and boosted demand from independent refiners.

Earlier on Tuesday, Nigeria’s oil minister said that some OPEC countries had requested an emergency meeting to consider supply cuts, Reuters reported.

12 that the only chance for supporting oil prices is to decline the OPEC production, but considering the acceleration of Iran-Saudi Arabia issue, it seems impossible that Riyadh decreases its output.

Prices fell below $30 a barrel briefly as British oil and gas company BP says it will cut 4,000 jobs.

At the same time, NDRC lowered the domestic gasoline and diesel price by 140 yuan and 135 yuan per barrel respectively, effective Thursday.

Net fuel exports were 1.48 million tonnes in December.

The most immediate catalyst for price declines may be concerns about declining demand in China, but the fundamentals of supply and demand are ultimately what’s behind the incredible downward ride of oil prices since 2014.

The Energy Information Administration will release official USA inventory figures later Wednesday. Brent North Sea crude prices tumbled to fresh 12-year lows on Tuesday and have shed more than 15 percent so far this year.

Demand for crude oil could rise 4.9 per cent in 2016, the country’s petroleum industry association said yesterday.

Benchmark Brent crude fell 69 cents settle at $30.86, after bottoming at $30.34.

Since the start of 2015 the rolling one-year correlation between United States crude and the dollar weighted against a basket of currencies has had an average negative correlation of around 94 per cent as the greenback strengthened and oil fell. China is not a new worry for oil traders. Traders fear that China’s economy, the world’s second-largest, is slowing down.

“If US crude oil inventories really did turn out that way, it would only add to more bearishness”, said Daniel Ang, a Phillip Futures analyst.

“We see a bounce off here… but a change in trend is not visible yet”, he said. They want to edge out shale gas producers in the United States, and they have been trying to achieve that goal by pumping oil at a very fast clip.

The question keeps coming up as to why prices are so low, oil expert, Morris Burns said there are several factors, “It’s just a flawless storm of things that drive the price down”.