Crude oil Extends Slide On Oversupply Fears on Morning

Crude Oil Update - Crude oil futures continued its long bearish run on Thursday, sliding more than 1 per cent in the domestic market amidst concerns that the OPEC’s verdict last week to maintain production at high levels overshadowed a drop in US crude oil supplies last week, the first in eleven weeks.

The cartel, which last Friday ditched its idea of limiting output to control prices in a bid to aggressively protect market share against rising threat from non-OPEC members, said that November output soared to a three-year high, raising concerns over a global supply glut. Driven by higher output from Iraq, the OPEC pumped 31.695 million barrels per day of oil in November 2015, up by 230,100 barrels per day from October.

Meanwhile, notwithstanding a bigger than expected decline of 3.5 million barrels in US crude oil stockpiles last week, traders remained wary amidst a 5 million barrel spike in inventory of US distillates, which include heating oil and diesel fuel, and total storage staying near the highest level unseen for this time of the year at least in the past 80 years.

The number of Americans who filed to claim jobless benefits soared to the highest level in five months last week, signaling a cooling labour market recovery that may curb fuel demand in the world’s biggest economy. US jobless claims rose by 13,000 to 282,000 in the week ended December 5, 2015.

Oil may trade on a cautious note today ahead of the weekly US rig count data which may signal the course of future production.

At the MCX, Crude oil futures, for the December 2015 contract, closed at Rs 2,467 per barrel, down by 1.16 per cent, after opening at 2,511, against the previous close price of Rs 2,496. It touched an intraday low of Rs 2,448.