Monday, 23 November 2015

Oil drops on supply glut despite cut in US oil rigs

Crude oil futures lost ground in early Asian trading on Monday, pressured by a global supply surplus despite a cut in the number of US oil rigs for an eleventh week out of 12. 

Benchmark front-month Brent futures for January LCOc1 had fallen 38 cents, or 0.85 percent, to USD 44.28 a barrel as of 0133 GMT, after it ending up 48 cents at USD 44.66 a barrel on Friday. 

US crude's West Texas Intermediate (WTI) January contract CLc1 dropped 54 cents, or 1.29 percent, to USD 41.36 a barrel against its previous settlement at USD 41.90. 

"The burden of carrying high US crude oil inventories is large," Kang Yoo-jin, commodities analyst at NH Investment and Securities based in Seoul, said in a note on Monday. 

"The markets would likely rebound only if they saw a fall in US crude inventories, while declining US crude output and seasonal demand provide some support to oil at low prices."

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