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Oil prices end down despite lower US inventories

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Oil prices steadied around 11-1/2-year lows, after rising earlier during the day following Chinese shares higher, as persistent global oversupply and a bleak demand outlook weighed on prices.

[NEW YORK] Oil prices fell to a fresh-multi year low on Wednesday as worries about a longstanding supply glut offset news of a surprise decline in US petroleum inventories.

US benchmark West Texas Intermediate for January delivery fell 35 cents to US$37.16 a barrel on the New York Mercantile Exchange, the lowest close since February 2009.

European benchmark Brent oil for January delivery shed 15 cents to US$40.11 a barrel in London.

Wednesday was the fourth straight day of falling prices. The declines follow a decision Friday by the Organisation of the Petroleum Exporting Countries not to cut output despite the weak global market.

Oil prices spent much of the session in positive territory after a US Department of Energy report showed US oil inventories fell 3.6 million barrels in the week ending December 4.

"We did have a fairly bullish number today on the headline number for crude," said Matt Smith, an energy analyst at ClipperData.

"I still feel like the market is not willing to push too much higher from here, given the backdrop of oversupply we're in." Tim Evans, an analyst at Citi Futures, said some of the data were inconsistent, and may reflect efforts by refiners to reduce year-end inventories for tax purposes.

"This lack of congruence may add a level of confusion in the near term, adding a degree of uncertainty to what is really going on," he said.

AFP