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| Crude Gold No More? |
OPEC has met and refused to cut production and shale oil is still rattling the market.
The Saudi King has changed and King Salman is in charge.
So, what is the crude oil position today(29 January)?
As expected, oil prices opened up weak in Asia after record US stockpiles sent it tumbling to near six year lows in the previous session.
To most analysts, the outlook truly looks bleak.
On Wednesday, the US reported record high inventories elevating further anxieties in the market.
According to the US Energy Information Administration (EIA), domestic crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million, their highest since the government began keeping records in 1982.
"The market expects stockpiles to keep rising, pushing front-month prices further down as refineries enter maintenance season and are likely run at lower utilisation rates," ANZ said in a morning note on Thursday.
Brent crude traded at US$48.60 (RM176) a barrel at 0131 GMT (9.31am Malaysian time) while US crude was at US$44.43 a barrel, both close to six year lows.
As a corollary, Swiss bank UBS said in a note on Thursday that cheap oil would not have a major boosting impact on Asian economic growth.
"Big, big drops in oil; small effects on economies... Cheap oil should give a small boost to Asian GDP, but not really enough to warrant major changes in growth forecasts," it said.
Researchers at Energy Aspects said in a note to expect a "a new normal in the making for China-slower and less oil intensive growth".
They added that "oil consumption in China will become more efficient, leading to slower demand growth of around 0.2-0.3 mb/d (million barrels per day) compared to expectations of above 0.5 mb/d."
So, for the whole year of 2015, what can you see through the looking glass, Alice?"
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