Oil Resumes Decline in Asia ahead of US Stockpiles Data

Global oil benchmark Brent and USA crude’s West Texas Intermediate (WTI) futures settled up more than $1 a barrel, after weather forecasts showed the United States may get some cold winter temperatures following an unusually balmy autumn. Oversupply concerns are still dominating the market, and Saudi Arabia has announced that they do not plan to cut oil production anytime in the near future.

Saudi Arabia pumped 10.13 million barrels a day during November, 230,000 barrels a day higher than production rates in the earlier month.

Oil prices jumped about $1 a barrel on Tuesday, as prospects of colder weather in coming weeks inspired buying a day after prices slid 3 percent, but slowing global demand and abundant supplies from OPEC members kept energy markets bearish.

Oil is trading near levels last seen during the global financial crisis amid signs the oversupply will be prolonged after the Organization of Petroleum Exporting Countries effectively abandoned output limits at a meeting earlier this month. Brent prices were set for a third year of declines after ending 2013 slightly lower and falling sharply over the past two years.

February Brent crude, the global benchmark fell 14 cents, or 0.4%, on London’s ICE Futures exchange to $36.33 a barrel, headed for a almost 37% annual drop.

Added to the picture, the United States – the world’s biggest consumer of crude – revealed Wednesday that oil inventories swelled by 2.6 million barrels to 487.4 million barrels last week.

Yesterday, the latest stockpile data from the USA sparked further glut fears as the stockpiles rose by 2.6mln barrels in the week to Christmas Day compared to the previous week. While U.S. output is down from a peak in April, production has fallen more slowly in response to low prices than many investors initially expected. In such cases, the projected Brent and WTI spread remains within the $5-$6 per barrel range in 2025 regardless of whether or not crude oil export restrictions are removed.

Oil prices moved up Thursday amid rising geopolitical tensions in Middle East.

The oil rout began in mid-2014 when it fell from a high of $115.

WTI rose 44 cents to $37.04 a barrel.

On Wednesday, U.S. government data showed an unexpected increase in U.S. crude stockpiles and record-high inventories in the key storage hub of Cushing, Okla., sending prices tumbling. It trades at an average volume of 5.91M shares versus 5265029 shares recorded at the end of last trading session.