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U.S. crude prices stabilise after jumping from 2003 lows

Published 2016-01-21, 08:04 p/m
© Reuters. U.S. crude prices stabilise after jumping from 2003 lows
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By Henning Gloystein
SINGAPORE, Jan 22 (Reuters) - U.S. crude oil prices were
stable in early Asian trading on Friday after bouncing away from
12-year lows the previous day as rallying financial markets gave
some traders reason to cash in on record short positions.
Front-month West Texas Intermediate (WTI) crude futures
CLc1 were trading at $29.82 per barrel at 0056 GMT, up 29
cents from their last settlement and over $3.50 above 2003 lows
reached earlier this week.
Traders said that a lot of people with open short positions
in the market, which profit from falling prices, had decided to
cash in when prices had fallen 30 percent between the beginning
of the year and the middle of this week, and flip into buying at
low costs, lifting prices.
"More stable global markets are likely to see speculative
buying re-emerge in commodities that have suffered heavy losses
in recent weeks. However, these rallies are likely to remain
short-lived," ANZ bank said.
Analysts said that the fundamental reason for low oil prices
remained unchanged, with producers around the world pumping over
1 million barrels of crude every day beyond demand, leaving
storage tanks brimming.
U.S. crude inventories USOILC=ECI rose by 4 million
barrels in the last week, compared with analyst expectations for
an increase of 2.8 million barrels, according to the U.S. Energy
Information Administration (EIA).
"At 486.5 million barrels, U.S. crude oil inventories remain
near levels not seen for this time of year in at least the last
80 years," the EIA said.

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