Crude oil traded near a one-month low as sliding equity markets and expectations of interest-rate increases in China dented investor confidence in the strength of the global economic recovery.
OPEC nations must improve their compliance with the group's output quotas to prevent further pressure on oil prices, Shokri Ghanem, chairman of Libya's National Oil Corp., said yesterday. A report today in the US, the world's largest oil user, will probably show existing home-sales fell for the first time in four months, according to a Bloomberg News survey of economists.
"We've seen a pretty significant turn in macro sentiment," said Toby Hassall, commodity analyst at CWA Global Markets Pty in Sydney. Oil "was very much a forward-looking market last year pricing in a recovery. We've seen some encouraging signs, and the US certainly is looking a lot better than it was 12 months ago, but that's a different thing to a material recovery."
Crude oil for March delivery was at $74.62 a barrel, up 8 cents, in after-hours electronic trading on the New York Mercantile Exchange at 10:04 a.m. in Singapore. Earlier the contract fell as much as 43 cents, or 0.6%, to $74.11. It dropped 2% to $74.54 on Jan. 22, the lowest settlement since Dec. 22.
Prices slumped 4.9% last week as US gasoline stockpiles reached a 22-month high, equities and commodities tumbled on the nation's bank reform plans, and investors fretted that China will raise interest rates to slow growth in the world's second-largest energy consumer.
Source BloombergUTV
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