Crude palm oil futures slide 0.52 pc on sluggish demand

Crude palm oil futures slide 0.52 pc on sluggish demand

Crude palm oil futures slide 0.52 pc on sluggish demand

A recovery in China's crude imports in November from a one-year low was enough to trump concerns about escalating USA shale production on Friday, as traders propelled West Texas Intermediate upward by 67 cents to settle at $57.36 per barrel and Brent up $1.20 to end the session at $63.40.

Oil prices were stable on Friday as the weight of a strengthening US dollar was countered by China's relentless thirst for crude and the OPEC-led supply cuts that have gradually tightened the market this year.

Booming demand will push China ahead of the the world's biggest crude importer this year.

Crude oil inventories fell 5.6 million barrels in the December 1 week to 448.1 million, 7.8 percent below the level a year ago, the Energy Information Administration (EIA) said in its weekly report Wednesday.

Tamas Varga, analyst with PVM Oil Associates, told Reuters threats of a strike later this month from a union in Nigeria, Africa's largest oil exporter, was supportive of prices, as was reduced flow along the Britain's Forties oil pipeline, one of the grades that sets Brent prices.

A statement by Kuwait's oil minister that OPEC and other oil producers will study before June next year the possibility of exiting their global oil supply-cut agreement also weighed on prices, traders said.

On the supply side, oil prices have been receiving support from the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers, most importantly Russian Federation, which has been withholding supplies to tighten the market. "OPEC and Russian Federation have taken away the risk to the downside", said Bjarne Schieldrop, chief commodities analyst with SEB Bank, adding it was unlikely that Brent would drop below $61 per barrel.

A higher rig count points to a further rise in USA crude production, which is already up by more than 15% since mid-2016 to 9.71 million barrels per day (bpd). USA energy companies this week added oil rigs for a third week in a row, the longest string of increases since summer, as higher crude prices prompted drillers to return to the well pad after a break in the autumn.

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