SINGAPORE: – Oil prices rebounded in Asia Thursday after falling sharply to fresh five-year lows in the previous session after OPEC cut its forecast for demand 2015 and US stockpiles saw a surprise surge, analysts said.
US benchmark West Texas Intermediate (WTI) for January delivery rose 58 cents to $61.52 while Brent crude for January was up 65 cents at $64.89 in mid-morning trade.
WTI tumbled $2.88 Wednesday while Brent lost $2.60 after the Organization of the Petroleum Exporting Countries said demand for the 12-nation cartel’s crude would fall to 28.92 million barrels a day next year. The figure is the lowest since 2003 and at least one million barrels fewer than it is producing now.
Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy EY, said the forecast was “adding to the woes” of oil prices.
“With the holiday season coming up and no major economic news expected, crude oil prices will stay soft till the end of the year,” Gupta said.
Oil prices have plunged more than 40 percent since 2014 peaks in June owing to slowing growth in China and emerging-market economies, a recession in Japan and a near-stall in the eurozone.
On top of that, OPEC last month said it would maintain output levels despite ample global supplies, in part due to cheaper oil extracted from North American shale rock.
Also Wednesday official data showed US crude stockpiles rose 1.5 million barrels in the week to December 5, upending analysts’ forecast for a 2.7 million barrel drop.
The strong overhang of stored oil raises concerns about demand in the world’s top crude consumer during the winter season.