United States crude West Texas Intermediate (WTI) was trading 63 cents higher at US$33.90 a barrel after settling at US$33.27 on Thursday.
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On Wednesday, the daily basket price of OPEC-produced crudes produced slid to $29.71 a barrel, down from $31.21 on Tuesday – marking the lowest level recorded since February 2004, according to data compiled by Bloomberg.
Futures soared as much as 3.2% NY after China postponed a controversial equity circuit breaker system and its central bank set the reference rate of Yuan little changed after an eight-day stretch of weaker fixings. Low oil prices will cut production and help balance supply and demand later this year, he said.
Oil traded near a 12-year low as investors focused on volatility in Chinese markets after the country sought to quell losses in equities and stabilize its currency.
Chart-watching oil analysts said if oil prices do not rally hard on Friday, they seem doomed to drop below US$30 a barrel for the first time since 2003.
Conversely, crude oil prices settled on Thursday, after previously declining and nearly reaching the lowest in 12 years, after crude oil market secured support from sales centers’covering procedures.
The new year is shaping up to be a rocky road to travel, since a recovery won’t take place until the oil market is convinced that further losses can be avoided.
The Shanghai Composite Index SHCOMP, +1.97% opened up 2.3% Friday morning, but the Nikkei NIK, -0.39% fell 0.4% to 17,697.96.
“While crude oil market outlooks are so pessimistic, the markets also have been dampened psychologically, with investors concerned of a crisis led by the Chinese economy”, said the analyst from NH Investment and Securities.
The U.S. Energy Information Administration said last month that production in 2016 would fall by 570,000 barrels per day (bpd) to 8.76 million bpd, an upward revision from its 520,000 bpd forecast in November.
The Organization of the Petroleum Exporting Countries, which includes those countries, effectively dropped output limits in early December, despite the global oversupply.
Oil bull Andy Hall’s Astenbeck Capital Management lost about 35% in 2015, CNBC reported on Thursday, citing a source who reviewed the fund’s performance.
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Among the foreign invitees to the meeting were British oil major BP’s chief executive Bob Dudley, International Energy Agency (IEA) executive director Fatih Birol, and Royal Dutch Shell’s director (Projects) Harry Brekelmans.
