Monday, 28 December 2015

Oil prices Weaken post-Christmas, U.S. Crude defends premium over Brent

Oil prices fell on Monday after the long Christmas weekend, with U.S. crudes defending a newly gained premium over internationally traded Brent contracts in quiet trading ahead of the end of the year.

Front-month U.S. West Texas Intermediate (WTI) futures were trading at $37.87 per barrel at 0311 GMT, down 23 cents from their last settlement.

Brent was down 16 cents at $37.73 a barrel, meaning that U.S. crude defended a premium it gained over the globally traded benchmark last week.

Trading volumes were down for both contracts in the post-holiday period. Only about 5,000 WTI contracts have changed hands so far during this trading session on Monday versus 8,953 contracts at this point in the trading session on December 7.

The U.S. market tightened slightly in December following reduced drilling activity, withdrawals from near record crude stockpiles and the prospect of crude exports following a 40-year export ban.

"The biggest adjustment to prices comes from WTI gaining premium over the Brent. This was mainly followed by the U.S. lifting its ban on crude oil exports," Singapore-based Phillip Futures said on Monday.

The brokerage added that it expected "a quiet week ahead" with the biggest expected news for energy markets likely coming from U.S. inventory data to be published on Wednesday and Thursday.

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