The ratings firm cut its forecast for USA crude from $48 to $40 a barrel in 2016, and said independent oil companies’ pre-tax cash flows will likely fall 20 to 25 percent next year as oil-price hedges roll off. The global benchmark fell $1.34 to $37.39 the previous session.
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West Texas Intermediate for January delivery CLF6, the front-month contract, rose 17 cents to $35.69 a barrel by 6:30 pm IST after finishing settled down almost 5 per cent on Wednesday.
Crude prices edged up on Tuesday, even as a major credit agency joined the chorus of forecasters predicting another bleak year for US drillers and oil-equipment suppliers.
“The market sentiment is that this will lead to a higher dollar and push commodity prices lower”, said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
Oil prices in NY slid to a new multi-year low on Wednesday (Dec 16) after U.S. data showed a big increase in petroleum stockpiles and higher levels of key petroleum products. US crude (CLc1) was trading at $36.82, up 51 cents.
Total crude inventories rose by 4.8 million barrels in the latest week, compared with analysts’ expectations for an decrease of 1.4 million barrels.
“We read any lifting of the United States export ban as a significant structural change…Lifting the ban could help to clear U.S. crude oil stocks”, said said Olivier Jakob, an analyst at consultant Petromatrix.
The US Fed hiked interest rates for the first time in almost a decade on Wednesday, a sign it believes that the US economy had largely overcome the calamity that was the 2007-2009 financial crisis. A stronger dollar makes dollar-priced oil more expensive to holders of other currencies.
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OPEC Secretary General, Abdullah al-Badri, said on Tuesday current low oil prices would not continue and may rise in a few months or a year.
