Market Close: Oct 30 Down
Oct 30th, 2014 by loren
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Crude-oil futures eased in Asian hours Thursday after posting overnight gains as markets absorbed the impact of the U.S. Federal Reserve’s monetary policy announcements. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $81.87 a barrel, down $0.33 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.09 to $87.03 a barrel. Global oil prices settled higher for the second consecutive day Wednesday after weekly U.S. oil stockpiles didn’t rise as much as they were expected to, and petroleum product stockpiles shrunk, indicating stronger demand. But the price strength is likely to be short-lived due to the oversupply situation in oil markets, analyst Daniel Ang at Phillip Futures said. “We find new resistance [for Brent crude] at $88.81 but find it extremely difficult for prices to even stay at current levels,” he said.
Additionally, the U.S. Federal Reserve announced the end of its monthly asset purchases with an optimistic outlook for the U.S. economy, boosting the greenback and putting downward pressure on oil prices. Abdalla Salem el-Badri, secretary-general of the Organization of the Petroleum Exporting Countries indicated on Wednesday that its oil production this year is likely to be the same as last year. The oil cartel is also unlikely to cut the ceiling on its overall production at a meeting next month, he said. However, Libya is reportedly increasing its oil prices now after having secured its market share with recent price cuts.
In the near-term, oil price may even fall below $80 a barrel, especially if the OPEC meeting on November 27 yields no results, Commerzbank said in a report. “We have therefore cut our Brent price forecast for the annual average in 2015 to $85 a barrel,” the bank said.