“We see a bounce off here… but a change in trend is not visible yet”, he said.
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Analysts have been shifting their price outlooks downward, with Barclays, Macquarie, Bank of America Merrill Lynch, Standard Chartered and Societe Generale cutting their 2016 oil forecasts this week.
WTI for February delivery fell $1.28, or 4.1 percent, to $30.13 a barrel at 2:07 p.m. on the New York Mercantile Exchange.
Indeed, money market futures 0#FF: are starting to price out the chance of multiple Fed rate hikes this year, with only a roughly 50 percent chance of a second rate hike priced in.
Many now say oil could drop into the $20 range.
China’s slowing economy has been another factor contributing to the oil rout, which has pulled prices down by around 70 per cent since mid-2014.
Falling oil prices seem to reflect a simple story of supply and demand.
Lower crude prices are leading to lower prices for gasoline, diesel, jet fuel and heating oil, giving drivers, shippers, and many businesses a big break on fuel costs.
MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS rose 0.3 percent in early trade but still stood near a four-year low touched on Monday, and was still down more than 8 percent since the start of 2016.
Oil rebounded on Wednesday with investors hunting for bargains after oil fell to a new 12-year low below the $30 mark in the previous session. BP Plc plans to cut 4,000 jobs, Petroleo Brasileiro SA slashed its spending plan and Malaysia’s Petroliam Nasional Bhd warned that it faces several tough years.
European and United States stock markets rallied Tuesday on easing concerns about global economic powerhouse China despite another fall in the price of oil. “However, for prices to get this low the pound would have to get no weaker against the dollar than it is today”, he added.
US crude stocks fell unexpectedly last week, data from industry group the American Petroleum Institute showed on Tuesday.
Reports have said that constant oversupply has led to prices being battered for around two years, while the recent slowdown in China’s economy has also been attributed for the fall. Year-to-date, both benchmarks have fallen around 15 per cent.
Motorists are saving every time they fill up. Production averaged 9.2 million barrels a day through Jan 1, according to EIA’s weekly data.
A stronger dollar has also pressured the energy complex.
But workers in the oil patch have paid the price.
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While plummeting oil prices have been great news for motorists, airlines and other businesses that rely heavily on fuel, some 95,000 jobs were lost in the energy sector by U.S.-based companies in 2015, according to the consulting firm Challenger, Gray & Christmas. The contract slid 69 cents, or 2.2 per cent, to US$30.86 on Tuesday, the lowest close since April 2004.
