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US crude falls back after jumping on hopes of Russia, Opec cooperation

Thursday, January 28, 2016 - 09:15
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Oil prices were higher Thursday after yet more volatile trading, as dealers reacted to further evidence of a supply glut and hints at possible action to reverse the market slide.

[SEOUL] US crude futures fell more than 1 per cent in Asian trading on Thursday, paring gains of nearly 3 per cent in the previous session, after Russia held out the possibility of cooperating with Opec to control global oversupply.

Falls were capped, however, by a weaker dollar following the Federal Reserve's decision to keep its overnight interest rate unchanged and the release of a statement suggesting it was re-evaluating the pace of future hikes.

U.S. crude lost 33 cents at US$31.97 a barrel as of 0008 GMT. It settled up 85 cents at US$32.30 a barrel, a 2.7 per cent gain, on the previous session.

Brent crude ended up US$1.30, or 4.1 per cent, at US$33.10 a barrel.

Russian officials have decided they should talk to Saudi Arabia and other Opec countries about output cuts to bolster oil prices, the head of Russia's pipeline monopoly said on Wednesday.

The Energy Information Administration said on Wednesday that US crude inventories rose by 8.4 million barrels last week, higher than analysts' expectations for a rise of 3.3 million barrels. That brought crude inventories to the highest level since the EIA began tracking the data.

Yet crude stocks at the Cushing, Oklahoma, delivery hub fell by 771,000 barrels, which supported the oil prices. "Overall inventories rose by 8.38 million barrels. This helped to narrow the spread between Brent and WTI overnight,"ANZ said in a note on Thursday.

Wall Street stocks and the dollar fell on Wednesday as the Federal Reserve held US interest rates unchanged, as expected, and said it was closely monitoring global economic and financial developments.

REUTERS