Faith in oil prices faltering

Markets still searching for bottom, losing more than 40 percent of their value since June.
By Daniel J. Graeber  |  Dec. 11, 2014 at 9:43 AM
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NEW YORK, Dec. 11 (UPI) -- Crude oil prices continued their steady decline Thursday after the previous down day despite signs of steady recovery in the U.S. labor market.

West Texas Intermediate, the U.S. oil benchmark, lost about 50 cents early Thursday to trade at $60.40 per barrel for the January contract. The slump follows trading Wednesday that saw oil prices shed more than a dollar after the Organization of Petroleum Exporting Countries trimmed its forecast for global oil demand.

Global crude oil prices have now lost more than 40 percent of their June value and analysts are wondering where the bottom is in the current market.

WTI prices are at a point where oil companies working in U.S. shale deposits are struggling to make a profit. Adam Sieminski, director of the U.S. Energy Information Administration, said Tuesday drillers may be struggling already, though 2015 production should still be at its highest level in more than 40 years.

Brent, the global price index, fared better than WTI, though still lost about 25 cents per barrel to trade near $64 per barrel for the January contract, suggesting traders may be losing faith in crude.

The drop in crude oil prices comes despite a report from the U.S. Labor Department that initial claims for unemployment assistance fell by 3,000 to a seasonally adjusted 294,000 for the week ending Dec. 6.

There were no special factors impacting this week's initial claims, the Labor Department said.

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