US oil prices dip near US$40 a barrel

US oil prices dipped on Thursday to finish near US$40 a barrel as worries about oversupply continued to weigh on the commodity. 

PHOTO: REUTERS

NOV 20, 20156:53 AM

[NEW YORK] US oil prices dipped on Thursday to finish near US$40 a barrel as worries about oversupply continued to weigh on the commodity.

US benchmark West Texas Intermediate for December delivery ended down 21 cents to US$40.54 a barrel on the New York Mercantile Exchange after earlier briefly dropping below US$40 a barrel.

European benchmark Brent oil for January delivery added four cents at US$44.18 a barrel in London.

Key factors behind the weakness in oil include still-lofty US oil production levels and a robust level of output from Saudi Arabia and other key members of the Organisation of the Petroleum Exporting Countries.

Analysts dismissed a call on Thursday from Saudi oil minister Ali al-Naimi for producers to work together to "stabilise" the oil market.

"The market isn't putting much store in the comment by Saudi oil minister Ali al-Naimi that Saudi Arabia is working with other producers to stabilize oil prices, viewing the comment as more of a longer-term 'motherhood' statement than a commitment to immediate action," said Tim Evans, energy analyst at Citi Futures.

Bart Melek, head of commodity strategy at TD Securities, said US$40 a barrel has been a "tough support level" psychologically and in terms of technical trade.

"The risk is that we may pass recent lows reached in the summer," he said.

Mr Melek said a drop in the dollar on Thursday lent support to oil, which is traded in international markets in the US currency.

AFP