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Oil held losses below US$49 a barrel
[HONG KONG] Oil held losses below US$49 a barrel before US government data forecast to show record crude inventories expanded further.
Futures were little changed in New York after losing 9.2 per cent the previous six sessions. US stockpiles probably increased by 3 million barrels for a 10th week of gains, according to a Bloomberg survey before data from the Energy Information Administration on Wednesday. Opec is due to release its monthly report Tuesday that will show production figures for February, while Kuwait wants to extend the six-month Opec-led deal to cut output beyond June.
Oil last week broke below US$50 a barrel for the first time since December as rising US supply has swamped the impact of supply reductions from members of the Organization of Petroleum Exporting Countries and 11 other nations that started Jan 1. While Opec Secretary-General Mohammad Barkindo said that February compliance to the deal will be higher than January, Russia's Rosneft PJSC said higher U.S. output is the "main threat" to the agreement.
"The market will continue to watch for OPEC compliance as US production surges," said David Lennox, a resources analyst at Fat Prophets in Sydney. "The price is unlikely to collapse below $40. If US output continues to climb, there is no way Opec will extend the cuts into the second half to increase the price for American companies to get the advantage." West Texas Intermediate for April delivery was at US$48.31 a barrel on the New York Mercantile Exchange, down 9 cents, at 3:22 pm in Hong Kong. Total volume traded was about 46 percent below the 100-day average. The contract fell 9 cents to US$48.40 on Monday, the lowest close since Nov 29.