Worries about a global glut of crude intensified earlier this month after the Organization of the Petroleum Exporting Countries stood by its policy of pumping crude even with inventories sitting at record.
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The potential USA supply to come onto the market would create more competition for global grades priced off Brent crude futures.
The under-pressure commodity suffered fresh selling on Wednesday after the US Department of Energy showed that supplies rose 4.8 million barrels in the week ending December 11. “A good price for consumers is the one at which you can really invest”.
Brent crude was trading at $37.52 per barrel at midday, about 43 percent less than year-to-date prices.
Also looming large is an expected increase in US interest rates this week.
A spending bill that lawmakers expect to be pushed through the House and Senate by the end of the week includes an end to restrictions on USA oil exports that have been in place since the mid-1970s. House Democrats are open to lifting the ban on US crude exports, depending on what concessions they would get in exchange, a Democratic leadership aide said Monday.
Venezuelan oil prices have fallen to a historic low of $29 per barrel, Reuters reported President Nicolas Maduro to have said Tuesday.
Moody’s worldwide rating agency sharply reduced its oil price assumptions in light of continuing oversupply in the global oil markets. Official inventory data is due on Wednesday from the U.S. Energy Information Administration.
“You can not be optimistic in such market conditions, keeping in mind that today Brent is below $39 a barrel”, said a second OPEC delegate, from a non-Gulf member. Producers were forced to discount their crude to encourage refiners to buy more domestic oil and import less. Brent has tumbled from a high above $115 in June a year ago.
The price is comparable to that of a half-liter bottle of water, sold at between 350 and 400 won at supermarket chains across the country.
“We are seeing nothing unusual about this week’s price bounce given the fact that the entire complex had become much oversold based on virtually all of our technical indicators”, Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch Associates said in a note.
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Oil fell more than 3 percent on Wednesday, snapping a two-day rebound after USA government data showed a surprise weekly build in crude inventories and the Federal Reserve raised interest rates for the first time in nine years.
