Oil prices fall
- 1 Likes
Oil prices fall on global growth concerns
Oil prices fell on Wednesday, pulled down by a U.S. supply glut and a drop in stock markets as China's government warned of increasing economic headwinds and as Japan was expected to report another quarter of GDP contraction.
International Brent crude oil futures (LCOc1) were at $61.14 per barrel at 07:05 GMT, down 94 cents, or 1.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures (CLc1) were at $52.44 per barrel, down 81 cents, or 1.5 percent.
Reuters technical commodity analyst Wang Tao said WTI could soon test support at $51.75 per barrel, while Brent was threatening to drop below $60 per barrel again soon.
Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said U.S. crude inventories rose by 5.4 million barrels in the week to Nov. 30, to 448 million barrels, in a sign that U.S. oil markets are in a growing glut.
Official U.S. government oil production and inventory data is due later on Wednesday.
Bank of America Merrill Lynch (NYSE:BAC) said in its 2019 economic outlook, published on Tuesday, that "most major economies are likely to see decelerating activity", although it added that "a steady stream of monetary and fiscal stimulus measures" was expected to stem the slowdown.
In Asian powerhouse Japan, the economy is expected to have contracted more again in the third quarter, with the slowdown deepening, a poll showed on Wednesday, with Q3 annualized GDP expected to fall by 1.9 percent.
A slowing economy may further undermine oil prices.
Bank of America said it expected Brent and WTI prices to average $70 and $59 per barrel respectively in 2019.
Brent and WTI have averaged $72.80 and $66.10 per barrel so far this year.