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Oil Prices Near Flat As Supply and Demand Balance

Oil Prices Near Flat As Supply and Demand Balance
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Δευ, 2 Δεκεμβρίου 2013 - 18:35
Crude oil futures were down slightly in London trading Monday, with supply and demand reasonably balanced, and ahead of an OPEC meeting that begins Tuesday.
Crude oil futures were down slightly in London trading Monday, with supply and demand reasonably balanced, and ahead of an OPEC meeting that begins Tuesday.

Brent crude for January delivery was down 27 cents at $109.42 a barrel on ICE Futures Europe. U.S. January crude oil futures were down 7 cents at $92.65 a barrel on the New York Mercantile Exchange.

Brent's price was supported earlier in the day by the HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity.

The China HSBC flash data originally came in at 50.4 and was then revised up to 50.8, giving a boost to oil. However, the number is still below the October reading of 50.9. A number above 50 indicates growth.

"The bullish data, combined with the expectation that OPEC will leave its oil production quota unchanged at 30 million barrels per day at its meeting in Vienna this week has supported the U.S. benchmark," as well as Brent, wrote Sucden Financial Research in a note to clients.

However, by late morning the prices had fallen. They are trading within a certain range at the moment and unlikely to break out, said Torbjorn Kjus of DNB Energy.

"The market will bang its head against the shorter dated averages," or indicators of where the price has been averaging in the last five to eight days, he said.

The Organization of the Petroleum Exporting Countries is due to meet in Vienna tomorrow, where "the production target of 30 million barrels per day is likely to be maintained," wrote Commerzbank. "In view of a sharp rise in U.S. oil production, there is a risk of a renewed supply surplus on the global oil market in 2014. OPEC is only likely to respond by lowering its production target if the price falls noticeably below $100, however," they said.

The ICE's gasoil contract for December delivery was down $9.25 at $933.75 a metric ton, while Nymex gasoline for January delivery was up 22 points at $2.6650 a gallon.

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