The Standard ­ Friday
Date: 02.01.2015
Page 35
Article size: 309 cm2
ColumnCM: 68.66
AVE: 178533.33
Oil ends on a low
after halving in 2014
as OPEC stands aside
Prices fell on Wednesday
to a five­year low
and ended with their
second­biggest annual
decline ever, down by
half since June
By REUTERS
Oil prices fell on Wednesday to a
fivc­atid­a­half­year low and end­
ed with their second­biggest annual
decline ever, down by half since June
under pressure from' a global glut of
crude. Just before the close, Brent
and US oil futures bounced off ses­
sion lows. But prices still settled at
their lowest since May 2009. Weekly
US data showed crude oil stockpiles
fell more than expected, but invento­
ries at the oil hub at Gushing, Oklaho­
ma, grew, keeping prices depressed.
Oil prices have collapsed this year
as the Organisation of the Petroleum
Exporting Countries (OPEC) opted to
maintain the same level of output de­
spite a global glut caused by expand­
ing US shale output and diminished
demand growth from China.
An analyst at Price Futures Group
Phil Flynn said the mood was "sour"
and trade choppy as dealers contin­
ued to hunt for a bottom, with vola­
tility exacerbated by thin holiday vol­
ume. "We are sowing the seeds for a
rally down the road, but it doesn't look
like any time soon," he said.
27 meeting this year decided against
cutting output. Despite its own fore­
casts of a growing surplus, the group
opted to defend its market share
against shale oil and other rival sup­
ply sources. Turmoil in Libya dented
OPEC supply in December to a six­
month low, a Reuters survey showed,
Brent settled down 57 cents at
$57.33 a barrel, bouncing off an in­
tra­day low of $55.81 but closing be­
low $60 for a fourth straight day. US
crude fell 85 cents to settle at $53.27
a barrel, down 45 per cent from a year
ago. Trading seesawed as traders bal­
anced positions for the new year and
digested a mixed report on US crude
stockpiles from the Energy Informa­
tion Administration.
ANNUAL DECLINE
US crude closed with its sec­
ond­largest annual decline on record.
The biggest came in 2008, when pric­
es collapsed in the wake of the finan­
cial crisis. The last round of OPKC out­
put cuts eventually brought them off
lows near $30 a barrel.
In contrast, OPEC at a November
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
The Standard ­ Friday
Date: 02.01.2015
Page 35
Article size: 309 cm2
ColumnCM: 68.66
AVE: 178533.33
although forecasts still point to a glut.
The EIA reported a weekly draw­
down US crude inventory, along with
small increases in demand for gas­
oline and heating oil and a rise in
stocks for gasoline and distillate.
Oil prices came under further
pressure from a survey showing Chi­
na's factory sector shrank in Decem­
ber for the firsl time in seven months.
Tliis should hurt energy demand in
the world's Number two consumer.
Meanwhile, Libya has made prog­
ress containing a fire at its largest oil
port that had destroyed four days of
the country's oil production, officials
and industry insiders have said.
Motorists queue at an oil filing sta­
tion. Oil prices have collapsed this
year as OPEC maintained the same
level of output despite a gtobal glut.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya