Oil prices under pressure before US energy report

[LONDON] World oil prices slid on Wednesday after major crude producers stressed they will maintain output levels despite global oversupply, while traders awaited the latest update on US crude inventories.

Oil sentiment was also soured after the World Bank slashed its global 2015 economic growth forecast to 3.0 per cent from 3.4 per cent, raising fresh doubts about future crude demand.

In early afternoon deals in London, Brent North Sea crude for February delivery lost 10 cents to US$46.49 per barrel.

US benchmark West Texas Intermediate for delivery in February dropped 14 cents at US$45.75 a barrel.

"Oil prices remain under pressure," said Commerzbank analyst Carsten Fritsch.

"The reason cited for this price weakness is the oversupply on the world market which is weighing on the Brent price."

Later on Wednesday, the US government's Department of Energy will publish data on American commercial crude stockpiles for the week ending January 9.

Oil had dived Tuesday close to a six-year low after Opec officials underscored the cartel's resolve to not cut output despite a supply glut and plunging prices.

Brent had slumped as low as US$45.19, striking the lowest point since March 2009.

The market languished close to that level on Wednesday.

"Opec is likely to stick with current production levels at least until the next Opec meeting in June," said Daniel Ang, an investment analyst with Phillip Futures in Singapore.

Crude prices were already on the decline after peaking above US$100 a barrel in June, but the fall accelerated in November when the 12-nation Organization of Petroleum Exporting Countries (Opec) decided to maintain its collective output ceiling.

Opec member United Arab Emirates on Tuesday urged the United States to cut its production of shale oil, which has been largely credited for the supply glut.

"We cannot continue to be protecting a certain price," UAE Energy Minister Suhail al-Mazrouei said.

"We have seen the oversupply, coming primarily from shale oil, and that needed to be corrected," he told participants in the Gulf Intelligence UAE Energy Forum in Abu Dhabi.

And Kuwaiti Oil Minister Ali al-Omair said: "We expect this situation to continue until the surplus on the market is absorbed and the world economy improves."

Analysts said investors were looking at a US stockpiles report due to be released on Wednesday for further clues on the supply situation in the world's biggest economy and oil consumer.

AFP