Oil market watch: crude looks to break below $50 a barrel
Brent crude oil futures for January delivery were down by $0.17 a barrel at $52.14/b around midday on Tuesday. December delivery WTI futures were $0.17/b lower at $54.78/b – now some 60% below the July record of over $147/b.
There was a brief rally following the capture of a Saudi oil tanker by pirates off the east African coast, but it was short-lived.
Indeed, further falls — perhaps significantly below $50/b — look much more likely than a sustained rally, as GDP and oil-demand forecasts continue to be revised downwards. In its November Oil Market Report, the International Energy Agency made another round of cuts to the outlook for Chinese demand, in the wake of downward revisions to the IMF’s growth forecasts.
What might help stabilize prices would be cuts from Opec at the end of the month, when its members meet in Cairo. The cartel has identified $70-90/b as a satisfactory range, but Opec president Chakib Khelil has said Opec is more likely to use a meeting scheduled for 17 December in Oran, Algeria to cut output. This though could change if the oil price remains in freefall.
