Oil prices hold near six-year lows

[LONDON] Oil prices steadied on Tuesday near six-year lows, with gains capped by lingering concern about a global supply glut, weak demand and Greece's political future, analysts said.

US benchmark West Texas Intermediate (WTI) for March delivery added just one cent to US$45.16 a barrel.

Brent North Sea crude for March rose ten cents to stand at US$48.30 a barrel in midday London deals compared with Monday's close.

Crude futures sank Monday to their lowest closing levels since early 2009, as markets largely ignored a warning from the Opec oil cartel that prices could surge to US$200 owing to shrinking investment in exploration.

Oil has lost more than half its value since June last year when the commodity was sitting at more than US$100 a barrel due to a supply glut that had been boosted largely by robust US shale oil production, and weak global demand.

Shailaja Nair, associate editorial director at energy information provider Platts, said the comments by Opec Secretary General Abdullah El-Badri did not alter "market fundamentals".

"There is still oversupply in the market, global demand is on a fall and the eurozone is suffering after the recent (Greek) election results," Mr Nair told AFP.

A weekend general election in Greece was won by the Syriza Party, which is touting anti-austerity policies that have sparked fears the country could exit the eurozone. The news initially sent the euro plunging to an 11-year plus low against the dollar Monday, although it recovered later.

Dealers will next focus on US durable goods and consumer confidence data to be released later Tuesday, said Daniel Ang, investment analyst at Phillip Futures in Singapore.

"Figures today would likely serve to emphasise the healthy growth that the US is experiencing," Mr Ang said.

In a separate development, the president of state-owned energy giant Saudi Aramco declared that world oil prices have fallen too far, but stressed it was for the market not Opec producers to shore them up.

"It's too low for everybody," Khalid al-Falih told a conference in Riyadh on Tuesday.

"I think even consumers start to suffer in the long term." Mr Falih also said American shale oil production is important for the world's long-term energy future and Saudi Aramco has marked an additional US$7 billion for its own shale projects.

Saudi Aramco is the world's largest oil company in terms of crude production and exports.

The kingdom is the leading exporter and top producer in the Organization of Petroleum Exporting Countries (Opec).

In November, the cartel decided to maintain its output ceiling at 30 million barrels per day, deepening the global price slump.

AFP