Oil price rebounds, as China, Eurozone, Japan growth worries

Oil prices rebounded in Asiatoday after falling sharply to fresh five-year lows in theprevious session after OPEC cut its forecast for demand 2015and US stockpiles saw a surprise surge, analysts said.

US benchmark West Texas Intermediate (WTI) for Januarydelivery rose 58 cents to USD 61.52 while Brent crude forJanuary was up 65 cents at USD 64.89 in mid-morning trade.

WTI tumbled USD 2.88 yesterday while Brent lost USD 2.60after the Organization of the Petroleum Exporting Countriessaid demand for the 12-nation cartel’s crude would fall to28.92 million barrels a day next year. The figure is thelowest since 2003 and at least one million barrels fewer thanit is producing now.

Sanjeev Gupta, head of the Asia-Pacific oil and gaspractice at business consultancy EY, said the forecast was"adding to the woes" of oil prices.“With the holiday season coming up and no major economicnews expected, crude oil prices will stay soft till the end ofthe year,” Gupta said.

Oil prices have plunged more than 40 percent since 2014peaks in June owing to slowing growth in China andemerging-market economies, a recession in Japan and anear-stall in the eurozone.

On top of that, OPEC last month said it would maintainoutput levels despite ample global supplies, in part due tocheaper oil extracted from North American shale rock.

Also official data showed US crude stockpiles rose 1.5million barrels in the week to December 5, upending analysts’forecast for a 2.7 million barrel drop.The strong overhang of stored oil raises concerns aboutdemand in the world’s top crude consumer during the winterseason.

AFP