SHAFAQNA – Oil prices have rebounded in the Asian markets after a sharp fall in the previous session of trade.
US benchmark oil, West Texas Intermediate, for January delivery gained 73 cents to USD 54.84 in Friday afternoon trade. Brent crude for February also increased by 32 cents to USD 59.59.
US oil plunged USD 2.36 to its lowest since May 2009 on Thursday when Brent dived USD 1.91.
Daniel Ang, an investment analyst at Phillip Futures, said that the market “will continue to see this type of market volatility” until “the issue of low global demand and oversupply is resolved.”
“There are two camps in the market at the moment. Some who believe prices can fall further, and others who are betting that it should be above USD 60,” Ang added.
Oil prices have plunged roughly 50 percent since June.
The sudden decrease in prices also stems from faltering global demand and the refusal by some producers, particularly Saudi Arabia and some other Persian Gulf monarchies, to cut their current output.
US multinational investment banking firm Goldman Sachs said the plunge in oil prices could threaten USD 930 billion of investment in new oil projects. As a result, new oil output could be cut by 7.5 million barrels a day, or eight percent of the current demand, by 2025.