Oil prices rebound after fresh lows

14th November 2014, Comments 0 comments

Oil prices bounced back Friday after diving to fresh lows caused by expectations that OPEC is unlikely to cut production levels to counter a global supply glut.

Despite the pullback, crude futures are expected to keep sliding well into 2015, held down by weak demand and increased shale production, the International Energy Agency (IEA) said.

Brent North Sea crude struck $76.

76 a barrel -- the lowest level since September 2010.

The contract for delivery in January later recovered to $78.

33 in London midday deals, a gain of 84 cents compared with Thursday's close.

US benchmark West Texas Intermediate (WTI) for December delivery also hit a four-year low at $73.

25 a barrel before rebounding to $74.

37, up 16 cents compared with Thursday's close.

Global prices have collapsed by about one third since June and were weighed down further on Thursday after the United States said it had produced 9.

063 million barrels of oil last week -- the highest production since at least January 1983 when official records began.

"Rightly or wrongly, we are seeing price adjustments in anticipation of OPEC not doing anything about global oversupply, or not doing enough," Ric Spooner, analyst at traders CMC Markets, told AFP.

Dealers are largely expecting the 12-nation Organization of Petroleum Exporting Countries to decide against reducing output when it meets later this month in Vienna, home to the cartel's headquarters.

A production cut by OPEC would run against its kingpin Saudi Arabia's recent price cuts for crude exports to the US market.

That move was seen by market observers as an effort to maintain market share as it faces competition from cheaper oil from US shale fields.

As pressure mounts on OPEC to slash output, Ali Al-Naimi, oil minister of the cartel's kingpin Saudi Arabia, said that "talk of a price war is a sign of misunderstanding -- deliberate or otherwise -- and has no basis in reality".

"We do not seek to politicise oil, nor do we collude against anybody.

For us, it is a question of supply and demand.

It is purely business," he said on Wednesday.

© 2014 AFP

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