Crude oil prices hold ground after slide

Business | 13 Jan 2020 11:17 am

Oil was steady after the biggest weekly drop since July as an easing of geopolitical tension in the Middle East turned attention back to a flood of new supply set to hit the market this year.

The threat of an outright war has receded since Tehran fired missiles at U.S.-Iraqi bases last week in retaliation for Washington’s assassination of its top general.

The situation in Iran remains volatile, however, amid protests against the government’s accidental downing of a commercial airliner.

In Libya, warring factions have called a cease-fire in their nine-month conflict. Oil prices are now back where they were in mid-December, with the market seemingly shrugging off the chance of more disruptions in the Persian Gulf.

The lack of a geopolitical risk premium is partly due to plentiful supplies of U.S. shale and a torrent of new crude from non-OPEC countries including Brazil and Norway.

On the demand side, the U.S. and China are set to sign their limited trade deal this week, which may improve sentiment.

“Without Iran-related energy disruption, additional non-OPEC supply will comfortably exceed demand, placing downward pressure on prices,” Stephen Innes, Asia Pacific Market Strategist at AxiTrader, said in a note. Hopes of a U.S. inventories draw may support prices this week, he said.

West Texas Intermediate crude for February delivery declined 1 US cent to US$59.03 a barrel on the New York Mercantile Exchange as of 9:57 a.m. in Singapore. The contract fell by 6.4 percent last week, the most since July 19.

Brent futures for March settlement dropped 4 US cents to US$64.94 a barrel on the ICE Futures Europe Exchange after losing 5.3 percent last week.

The global crude benchmark traded at a US$5.96 premium to WTI for the same month. 

Search Archive

Advanced Search
January 2020

Today's Standard

Yearly Magazine

Yearly Magazine