Oil trades near 6-year low amid global growth concerns

Investing.com - Oil futures traded near the lowest level in nearly six years on Wednesday, as concerns over the gloomy economic outlook exacerbated fears over a glut in global supplies.

On the New York Mercantile Exchange, crude oil for delivery in February shed 65 cents, or 1.41%, to trade at $45.25 a barrel during European morning hours.

A day earlier, New York-traded oil futures hit $44.20, a level not seen since March 2009, before settling at $45.89, down 18 cents, or 0.39%.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery declined 68 cents, or 1.46%, to trade at $45.91 a barrel.

On Tuesday, London-traded Brent prices touched $45.19 a barrel, the weakest level since April 2009, before ending at $46.59, down 84 cents, or 1.77%.

The World Bank lowered its global growth forecast to 3.0% for this year from an earlier estimate of 3.4%, citing weaker than expected growth in the euro zone, Japan and some major emerging economies.

The agency also trimmed its 2016 forecast for global growth to 3.3% from 3.5%.

London-traded Brent prices have fallen nearly 60% since June, when it climbed near $116, while WTI futures are down almost 58% from a recent peak of $107.50 in June.

Concerns over weakening global demand combined with indications that the Organization of the Petroleum Exporting Countries will not cut output to support oil markets have weighed on prices in recent months.

On Tuesday, United Arab Emirates’ oil minister said that OPEC will stick to its decision to keep oil output unchanged, regardless of current oil prices.

Oil traders awaited the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

Wednesday’s government report was expected to show that U.S. crude oil stockpiles rose by 0.5 million barrels last week, while gasoline stockpiles were forecast to increase by 3.5 million barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3.9 million barrels in the week ended January 9.

The report also showed that gasoline stockpiles increased by 1.6 million barrels, while distillate stocks expanded by 416,000 barrels.

Investors looked ahead to data on U.S. retail sales later in the session, in addition to reports on import prices and business inventories, for further indications on the strength of the economy.

The US dollar index, which measures the greenback against a basket of six major currencies, hovered near a 12-year peak, boosted by the diverging policy outlook between the Fed and central banks in Europe and Japan.

The euro was trading close to a nine-year low amid speculation the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.

Elsewhere in the commodities market, copper for March delivery fell by as much as 7.9% to hit a session low of $2.434 a pound, a level not seen since June 2009, before trading at $2.493, down 15.1 cents, or 5.71%.