Brent edges upwards

Ali bin Ibrahim Al-Naimi, Saudi-Arabia's oil minister

Ali bin Ibrahim Al-Naimi, Saudi-Arabia’s oil minister

11 December 2014 – Brent crude ticked higher on Thursday but remained below $65 per barrel, and not far above five-year lows hit in the previous session, with the market’s bearish tone largely intact.Comments by the Saudi Arabian oil minister shrugging off an output cut on Wednesday renewed worries about a global glut that has slashed prices by more than 40% since June, Reuters reported.

Brent crude edged up $0.51 to $64.75 by Thursday morning, a little more than a dollar away from the previous session’s low of $63.56 – the weakest since July 2009. The benchmark had closed down almost 4% on Wednesday, according to the news wire.

“This is a bit of a return to a more normal pattern of trading for us in this time zone,” CMC Markets chief market strategist Michael McCarthy told Reuters.

“Often we reverse the overnight moves as the shorter-term trading interests take a profitable cut out of their positions.”

US crude rose $0.47 to $61.41, after sharp losses of almost 5% in the previous session, its biggest daily drop in almost two weeks.

The US benchmark came under pressure as crude inventories in the country rose unexpectedly last week, data from the Energy Information Administration showed.

Crude stocks rose by 1.5 million barrels in the week to 5 December, compared with analysts’ expectations for a 2.2-million-barrel draw.

Traders are now eyeing an increasingly competitive battle for market share among Opec exporters, for clues on when and at what price they would step in to help balance oil markets.

Leading the challenge is Kuwait, which has set the official selling price for its crude sales to Asian buyers for January at $3.95 per barrel below the average of Oman/Dubai quotes, a trader said, the lowest it has been since December 2008.

Global demand for Opec crude in 2015 is expected to fall to its lowest in more than a decade and far below current output, the group said on Wednesday, indicating a hefty supply surplus without Opec output cuts or a slowdown in the US shale boom.

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