[SINGAPORE] Oil prices opened up weak on Thursday in Asia after record US stockpiles sent it tumbling to near six year lows in the previous session, and analysts said that the outlook remained weak.
US crude prices tumbled on Wednesday after the US reported record-high inventories that raised anxieties about the global oil glut that had pressured the market since last summer.
The US Energy Information Administration (EIA) said domestic crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million, their highest since the government began keeping records in 1982. "The market expects stockpiles to keep rising, pushing front-month prices further down as refineries enter maintenance season and are likely run at lower utilisation rates," ANZ said in a morning note on Thursday.
Thursday's markets opened up close to their previous settlement levels, and analysts said the outlook remained weak.
Brent crude was trading at US$48.60 a barrel at 0131 GMT, US crude was at US$44.43 a barrel, both close to six year lows.
Swiss bank UBS said in a note on Thursday that cheap oil would not have a major boosting impact on Asian economic growth. "Big, big drops in oil; small effects on economies... Cheap oil should give a small boost to Asian GDP, but not really enough to warrant major changes in growth forecasts," it said.
Researchers at Energy Aspects said in a note that "a new normal is in the making for China-slower and less oil intensive growth".
They added that "oil consumption in China will become more efficient, leading to slower demand growth of around 0.2-0.3 mb/d (million barrels per day) compared to expectations of above 0.5 mb/d."