(MENAFN- The Peninsula) Global crude prices fell again yesterday, a day after a short-covering rally, as traders placed new bets that the market would resume a six-month rout on worries about a supply glut.
Benchmark Brent and US crude each fell more than $1 a barrel to session lows in New York after initially extending Wednesday's short-covering, which lifted prices by more than $3. They later retraced some losses, with Brent hovering at the psychologically-important $60 mark and US crude trading above $55.
Traders braced for more selling in a market that had already lost nearly 50 percent of its value since June. "We're continuing to search for a bottom and might even see another significant drop before the year-end," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
While the slide appeared to be on renewed worries about oversupply, some also cited a Bloomberg report that said a Nigerian port workers union had suspended a strike. Separately, the Opec country's two major oil worker unions will meet with the government to discuss an end to a strike that began on Monday. So far the strike has not affected oil exports, they have said.
Brent's front-month contract was down 55 cents to $60.60 by 1728 GMT, after hitting a session low at $59.67. US crude fell 40 cents to $56.07, having earlier fallen to $55.04.
Brent broke below $59 and US crude breached the $54 level this week on a rout sparked by worries about fast-growing US shale oil supplies. Opec's decision not to cut output accelerated the price drop. Oil companies also have been announcing cuts in exploration and capital spending.
Chevron Corp put a plan to drill for oil in the Beaufort Sea in Canada's Arctic on indefinite hold and Marathon Oil cut its capital expenditure for next year by about 20 percent. Canadian oil producers deepened cuts in 2015 spending, as Husky Energy, MEG Energy and Penn West Petroleum joined those scaling back capital budgets. The oil minister of Saudi Arabia, the world's top crude exporter, said on Thursday he believed the selloff is "a temporary situation and will pass."
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