Oil ends lower on supply glut concerns

“A year or more of large draws may be required to normalize global inventories, which would delay any need to incentivize US investment and production until mid-2018 or later”, the bank added.

These journeys illustrate how the global oil market has been upended by the collapse in prices that was triggered in 2014 by the USA shale boom.

SINGAPORE: U.S. crude oil futures were steady in lackluster early Asian trading on Friday as liquidity faded ahead of the Lunar New Year holiday across large parts of the region.

Only 0.1 percent of global production has been curtailed because it’s unprofitable, according to a report from consultants Wood Mackenzie Ltd. Canada, the USA and the North Sea have been affected the most by closures related to low prices, according to Wood Mackenzie. The slump in prices has slashed earnings from Royal Dutch Shell Plc to Chevron Corp., while Exxon Mobil Corp. has reduced its drilling budget to a 10-year low.

“WTI couldn t maintain a rise even with the rig count”, said John Kilduff of Again Capital, pointing to “incredibly negative” fundamentals.

“We believe the second half of the year will show a slight recovery underpinned by the stabilizing of commodity prices”.

Futures were little changed in NY after declining about 8 per cent last week.

U.S. crude futures were also up 9 cents at $30.98, after falling 83 cents to $30.89 on Friday.

Del Pino is now holding meetings with producers of the Organization of the Petroleum Exporting Countries, or OPEC, to discuss steps to prop up oil prices.

Venezuela wants an emergency meeting of producers, and Del Pino reportedly said Wednesday that six countries, including OPEC members Iran and Iraq and non-members Russian Federation and Oman, would meet.

Talk of natural gas talks with OPEC, Iran, Russia and Venezuela was played down by Russia. “The likelihood of success is slight, but any sign of action is eagerly awaited”. Russian Federation has always said it can’t easily cut production for technical reasons—restarting oil wells is a lot harder in frozen Siberia than in the Arabian desert.

The firm also cautioned against expecting further closures, because “many producers will continue to take the loss in the hope of a rebound in prices”. As of January 15th, there was short interest totalling 45,035,395 shares, an increase of 35.1% from the December 31st total of 33,345,867 shares, AnalystRatings.NET reports. Diesel futures advanced 4.5 per cent in the period. The contract slid 58 cents to $34.46 Thursday.

The risks are weighted to the downside because of the global glut, Mr Evans said. The US is expected to see the biggest decline in production, with output forecasted to drop by 380,000 barrels per day in 2016 from almost 13.5 million barrels per day.