United States heating oil prices fell 40 percent for a second year in a row. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February rose $1.06, or 2.9%, to finish at $37.87 a barrel.
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“I think the renewed decline in oil could affect sentiment over energy stocks in Asia today, although we are likely to see very low volumes on the last trading day of the year”, said Bernard Aw, market strategist at IG Markets in Singapore.
Oil prices remained in the doldrums during their final Asian- hours trading session of 2015 after record crude inventories in the USA reinforced concerns about a global supply glut that has pulled down prices by a third over the past year.
Front-month U.S. West Texas Intermediate crude futures CLc1 were trading at $37.18 per barrel at 0140 GMT, down 69 cents or 1.82 percent from their last settlement.
In addition, Sloup said, “there is some housekeeping before the end of the year” as investors arrange portfolios to limit exposure to the risk of betting too much on falling prices.
Brent crude started the year at around US$58 a barrel having halved in the previous six months. Brent, the global benchmark, declined $1.21, or 3.2%, to $36.58 a barrel on ICE Futures Europe. USA inventories are now some 125 million barrels higher than the five-year average and could hit a new record high during the first quarter when inventories tendo rise.
The American Petroleum Institute releases its stockpiles report later Tuesday and the more closely watched US Department of Energy (DoE) report comes out on Wednesday.
Oversupply issue will be exacerbated further once Iran returns to the global oil market early next year after western-imposed sanctions are lifted.
Oil prices jumped about $1 a barrel on Tuesday, as prospects of colder weather in coming weeks inspired buying a day after prices slid 3 percent, but slowing global demand and abundant supplies from OPEC members kept energy markets bearish.
The immediate outlook for oil prices remains bleak. A Bloomberg survey before an official government report on Wednesday projected a drop in stockpiles of 2.5 million barrels.
For most of the United States, a brief cold period is also not expected to last much more than a week. Saudi Arabia, the world’s largest crude exporter, has led the group in fighting for market share against higher-cost producers such as shale drillers in the US.
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The low oil prices are good news for consumers taking advantage of cheap gasoline.
