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Oil futures resume decline amid doubts over Wednesday's rally

Published 01/15/2015, 03:21 AM
WTI, Brent oil futures resume decline after Wednesday's big gains
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Investing.com - Oil futures resumed their decline on Thursday, as market players continued to focus on a glut in global supplies.

On the New York Mercantile Exchange, crude oil for delivery in February shed 60 cents, or 1.25%, to trade at $47.88 a barrel during European morning hours.

A day earlier, New York-traded oil futures surged $2.59, or 5.64%, to settle at $48.48 a barrel, as investors returned to the market to close out bets on lower prices. Nymex prices hit $44.20 on Tuesday, a level not seen since March 2009.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery declined 91 cents, or 1.82%, to trade at $48.96 a barrel.

On Wednesday, London-traded Brent prices rallied $2.04, or 4.27%, to close at $49.86 a barrel, as traders repositioned their portfolios ahead of the expiration of the February contract. Brent touched $45.19 a barrel on Tuesday, the weakest level since April 2009.

London-traded Brent prices have fallen nearly 60% since June, when it climbed near $116, while WTI futures are down almost 58% from a recent peak of $107.50 in June.

Concerns over weakening global demand combined with indications that the Organization of the Petroleum Exporting Countries will not cut output to support oil markets have weighed on prices in recent months.

At the same time, increasing supplies of crude oil from North American shale formations have helped create a glut in world markets.

Weekly data released Wednesday showed that oil supplies in the U.S. rose more than expected last week, exacerbating fears over a glut in supplies.

Supplies rose by 5.4 million barrels in the week ended January 9, above expectations for an increase of 0.5 million barrels.

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