Brent prices rose on Tuesday after five consecutive days of losses and a five-year low. US crude rose with players seeking a sustainable oil price in the market that is being haunted by concerns of oversupply.
Light, sweet crude futures for January delivery on the New York Mercantile Exchange climbed 1.2% or 77 cents to $63.82 per barrel.
On London’s ICE Futures exchange, January Brent crude climbed 1% or 65 cents ending at $66.84 per barrel, as reported by Market Watch.
Futures had been swinging in an out of the positive territory before moving higher in the choppy trading day amid concerns on the Chinese economy and Greece’s political turmoil.
Analyst at Schneider Electric, Matt Smith said, “Weakness in the dollar is encouraging a bounce today, as is some brave bargain-hunters trying to catch a falling knife.”
Gene McGillian, senior analyst at Tradition Energy was quoted by Reuters as having said, “We’re just treading water if you ask me. There’s this idea again that we may have over-extended to the downside and that’s why you’re seeing some short covering coming in as people try to find a bottom to the six-month slide we’ve seen now.”
In the coming months, oil prices will be determined by the supply and demand as reported by an oil official from United Arab Emirates. This is the latest sign that the Organization of the Petroleum Exporting Countries’ Gulf members were ready to weather lower oil prices after deciding not to cut production.
The tumble in US crude futures and Brent has been further fueled by price cuts made by Iraq and Saudi Arabia to exports to the US and Asia since the largest producers in OPEC are trying to get market share.
The latest US projections show that oil production from the largest three US shale plays should increase by more than 100,000 barrels a day by January.
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