Oil Returns To Downward Slide, Off 10% For Week

New York (AFP) – World oil prices resumed their slide Friday despite solid US jobs data and easing Chinese market volatility as concerns about the global oversupply remained in focus.

US benchmark West Texas Intermediate (WTI) for February delivery slipped 11 cents to $33.16 a barrel on the New York Mercantile Exchange, the lowest level since February 2004.

In London, Brent North Sea crude for delivery in February, the European benchmark for crude oil, closed at $33.55 a barrel, down 20 cents from Thursday’s settlement.

In a rough week for the market, WTI and Brent both lost about 10 percent.

The benchmark contracts forayed into positive territory a few times Friday following stabilization in Chinese financial markets after days of turmoil and an unexpectedly strong December job growth report in the United States, the biggest consumer of crude oil.

“There may be a short-term case for a technical price recovery, but the fundamentals remain firmly bearish as confirmed most recently by the net build in US overall petroleum inventories for the week ended January 1,” said Tim Evans of Citi Futures.

The turbulence in China raised questions about the health of the commodities-hungry economy and the government’s ability to handle a slowdown.

“The worries over China this week have investors again wondering about the source of future demand for commodities,” said analyst Jasper Lawler at CMC Markets UK.

“In all likelihood the demand won’t come from anywhere, it is supply that has to come down to meet a new-normal of lower demand.”

Carl Larry, oil and gas consultant at Frost & Sullivan, saw a case for greater US demand growth in the latest jobs numbers.

“Right now when you see that the US economy added almost three millions jobs in the past year and 292,000 in December, it looks like we’re going to see oil demand growth in the new year,” he said.

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