News / Economy

US crude oil slips toward $30

Tuesday, 12 January 2016 11:13 AM [ Last Update: Wednesday, 13 January 2016 12:12 PM ]

This August 21, 2013 file photo shows an oil well near Tioga, North Dakota, the United States. (AFP photo)

US crude oil has slipped toward US$30 per barrel to a 12-year low as heavy oversupply showed no sign of easing.

West Texas Intermediate (WTI) for delivery in February was sold at $30.54 per barrel on Tuesday morning. It lost 87 cents, or 2.77 percent, of its value.

Meanwhile, European benchmark Brent crude slumped 98 cents, or 3.11 percent, to $30.57.

In December 2003 and in April 2004, WTI touched a low of $29.66 and Brent hit $29.95.

Last week, prices of oil went down 10 percent as investors grew concerned about the global supply glut and weakness in China, the world's biggest energy user, and the increasing strength of dollar.

A possibility of potential geopolitical clashes, including Saudi Arabia’s war rhetoric against neighbors, has also kept traders on edge.

"The drop mainly comes from the increasing dollar strength... That accounts for the bulk of the movement," Phillip Futures investment analyst Daniel Ang told AFP.

However, he added that prices are unlikely to breach the $30 psychological support barrier.

"We may see some bearishness in the short term where prices may continue falling a little bit but I think they will remain highly supported (at $30)," he said.

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