Oil trades lower in year-end cooling off

Oil trades lower in year-end cooling off


Singapore: World oil traded lower in Asia on Monday, 10 December, as the market entered a traditional year-end cooling off period and concerns persisted over slower US economic growth, dealers said.

In morning trade, New York’s main oil futures contract, light sweet crude for January delivery, was 49 cents lower at $87.79 a barrel, from $88.28 in New York on Friday.

Brent North Sea crude for January delivery was 24 cents lower at $88.40 a barrel from $88.64 in London on Friday.

Dave Ernsberger, Asia director of global energy information provider Platts, said the oil market traditionally cools at this time of year and there are now no strong factors that would lead to a rally.

“This is when you would expect prices to fall pretty significantly, actually," he said, describing the mood as “cautiously bearish".

Crude prices have fallen in choppy trading since striking record highs close to 100 dollars in late November.

Oil market experts say there are widespread fears of a US-led global economic slowdown that could dampen demand for energy, especially oil.

On Wednesday, prices initially spiked in reaction to a decision by Opec, at a crucial meeting in Abu Dhabi, to leave its daily crude output quota unchanged at 27.25 million barrels.

Values subsequently fell back, which Ernsberger said probably reinforces bearish sentiment.

The Organization of Petroleum Exporting Countries (Opec) pumps about 40% of the world’s crude supplies.