Oil dips post-Christmas

28-Dec-15

Post-Christmas, Brent crude oil futures have regained a slight premium over their US counterpart, but both benchmarks fell as there is no end in sight for oversupply concerns, as per Reuters. Brent is trading at US$37.74 a barrel, down 15 cents from its last settlement, while U.S. West Texas Intermediate (WTI) futures dipped to US$37.73 per barrel. The U.S. market tightened slightly earlier in December, pushing it into a premium over global oil markets, following reduced drilling activity, withdrawals from near record crude stockpiles and the prospect of crude exports following a 40-year export ban. While the U.S. slightly tightened, international markets remain over supplied as producers like Russia and the Organization of the Petroleum Exporting Countries (OPEC) produce between half a million and 2 million barrels of crude every day in excess of demand. This is happening while developed and emerging economies especially in Asia are slowing.