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NYMEX crude hovers near recent lows in early Asian trade

Published 01/17/2016, 06:09 PM
Updated 01/17/2016, 06:11 PM
© Reuters.  NYMEX crude hovers near recent lows
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Investing.com - Crude oil prices in Asia hovered near recent lows in a fairly light regional data day and with U.S. markets closed for Martin Luther King Day.

On the New York Mercantile Exchange, crude oil for delivery in February was quoted around $30.00 a barrel.

In the week ahead, investors will continue to focus on economic reports out of China, with Tuesday’s highly-anticipated fourth quarter GDP report in the spotlight.

Meanwhile, the U.S. is to release data on inflation and building permits as market players look for further indications on the strength of the economy and the future path of rate hikes.
Ahead of the coming week, Investing.com has compiled a list of these and other significant

The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.

Last week, oil futures fell further below the $30-level to hit a new 12-year low on Friday, as ongoing concerns over a global supply glut continued to drag down prices.

Oversupply issue will be exacerbated further once Iran returns to the global oil market after western-imposed sanctions were lifted. Analysts say the country could quickly ramp up exports by around 500,000 barrels.

The surge in Iranian shipments is viewed as bearish for crude, which has fallen approximately 75% from its peak of $115 two summers ago, amid a glut of oversupply on markets worldwide.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.

Most market analysts expect a global glut to worsen in the coming months due to soaring production in North America, Saudi Arabia and Russia.

On the ICE Futures Exchange in London, Brent oil for March delivery tumbled $1.94, or 6.28%, on Friday to close the week at $28.94 a barrel after sinking to a session low of $28.82, a level not seen since January 2004.

On the week, London-traded Brent futures plunged $4.40, or 13.74%, its sixth losing week in the past seven. Brent prices are down almost 22% since the start of the year, as lingering concerns over China’s economic outlook added to the view that a global supply glut may stick around for much longer than anticipated.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Prices showed little reaction after industry research group Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. decreased by one to 515 last week. Despite the declining rig count, U.S. production levels remain near record-high levels.

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