Oil market falls back once again

11th November 2015, Comments 0 comments

Oil prices resumed their decline on Wednesday, with global crude oversupply still dampening investors' sentiment despite occasional rallies.

Prices had risen the previous day after a four-day losing streak, as traders weighed a price outlook from the International Energy Agency (IEA) and a lowered US estimate for crude production.

Oil prices have collapsed by more than half since mid-2014 with prices languishing under $50 a barrel, hurt by the supply glut and the decision by oil exporter grouping OPEC to maintain output to counter booming US shale production.

The Paris-based IEA, in a report Tuesday, forecast that oil prices would recover to $80 a barrel by 2020.

At around 1200 GMT Wednesday, US benchmark West Texas Intermediate for delivery in December was trading 52 cents lower at $43.69 a barrel.

Brent North Sea crude for December was down 21 cents at $47.23 a barrel.

A strong dollar, fuelled by widening expectations that the US Federal Reserve will raise interest rates next month, has also been keeping a lid on prices.

Oil is traded in dollars and a buoyant US currency would make the commodity more expensive for those holding weaker units, lowering demand and prices.

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© 2015 AFP

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