News / Business

Oil prices rise despite glut concerns

Thursday, 29 January 2015 5:25 AM [ Last Update: Thursday, 29 January 2015 5:34 AM ]

Global oil prices rise despite concerns over a glut. (File photo)

Oil prices have witnessed a rise despite concerns that a record rise in US crude reserves could cause prices to keep falling.

In Thursday mid-morning trade, US benchmark West Texas Intermediate (WTI) for March delivery increased by seven cents to $44.52, while Brent crude for March also rose by 18 cents to $48.65.

The prices of the two oil types had initially experienced a decrease over an overstocking of crude by the US. After official data released on January 28 showed that US crude stockpiles soared by 8.9 million barrels to 406.7 million in the week ending on January 23, the WTI dropped $1.78 in New York and Brent fell $1.13 in London. According to the figures, the rate was the highest level of oil production since Washington started weekly records back in 1982.

The head of the Asia-Pacific oil and gas practice at consultancy firm EY, Sanjeev Gupta, said the recent US figures have “added to the pressure on benchmark prices.”

Oil prices had slumped nearly 60 percent since June last year over increased supplies by certain countries such as Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries (OPEC), and lackluster global economic growth.

OPEC, which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market mainly due to opposition from Saudi Arabia, instigating the supply glut.

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