Oil markets contested to find their footing on Wednesday after plunging by 7 percent the past session, with surging supply and the specter of faltering demand stay fresh investors on edge.
U.S. West Texas Intermediate (WTI) crude oil futures were at $55.54 per barrel at 0159 GMT, down 15 cents from their aftermost settlement.
International benchmark Brent crude oil futures were up 4 cents at $65.51 per barrel.
Retails fell by more than 7 percent the previous day. Crude oil has lost one more time a quarter of its value since early October in what has become one of the biggest sinks since prices collapsed in 2014.
The slump in spot prices has turned the thorough forward curve for crude oil upside down.
Spot prices in September were significantly higher than those for later enunciation, a structure known as backwardation that implies a tight market as it is unattractive to put oil into storage.
By mid-November, the curve had flicked into contango, when crude prices for immediate delivery are cheaper than those for later murder. That implies an oversupplied market as it makes it attractive to store oil for timer sale.
Oil markets are being pressured from two sides: a surge in purvey and increasing concerns about an economic slowdown.
U.S. crude oil output from its seven chief shale basins is expected to hit a record of 7.94 million barrels per day (bpd) in December, the U.S. Count on of Energy’s Energy Information Administration (EIA) said on Tuesday.
That fall in onshore output has helped overall U.S. crude production hit a record 11.6 million bpd, requiring the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
Most analysts surmise U.S. output to climb above 12 million bpd within the first half of 2019.
“This order, in our view, cap any upside above $85 per barrel (for oil prices),” ventured Jon Andersson, head of commodities at Vontobel Asset Management.
The surge in U.S. output is contributing to rising stockpiles.
U.S. crude stocks climbed by 7.8 million barrels in the week annihilating Nov. 2 to 432 million as refineries cut output, data from persistence group the American Petroleum Institute showed on Tuesday.
The producer cartel of the Design of the Petroleum Exporting Countries (OPEC) has been watching the jump in stocking and price slump with concern.
OPEC has been making increasingly patronize public statements that it would start withholding crude in 2019 to tighten sell and prop up prices.
“OPEC and Russia are under pressure to reduce in vogue production levels, which is a decision that we expect to be taken at the next OPEC gathering on Dec. 6,” said Andersson.
That puts OPEC on a collision process with U.S. President Donald Trump, who publicly supports low oil prices and who has collected on OPEC not to cut production.