Oil steady ahead of stockpile data

24/12/2008

Oil prices have held steady around the $39 (£26) mark during trading this morning (December 24th), although data from the US may push prices down later in the day.

According to Reuters, analysts are predicting that US stockpile figures are likely to show that crude stocks grew last week, suggesting that demand is continuing to weaken despite efforts by the Organisation of the Petroleum Exporting Countries (Opec) to cut supply in a bid to support prices.

If oil prices do drop further, this in turn could lead to a concomitant fall in the price of heating oil, in addition to DERV, farm diesel, bunker fuel and other distillates.

Meanwhile, Chakib Khelil, president of Opec, has told Reuters that the cartel may have to cut production again in a bid to catch the plummeting crude price.

"We will review the market again and make a proper decision if we see that prices still continue sliding despite the compliance," he said.

The recent 2.2-million-barrels-a-day supply constriction will come into effect from January.