LONDON – US light crude for January delivery fell $2.64 to $33.58 a barrel early Friday. It earlier touched $33.44, the lowest since early February 2004. London Brent crude was trading 18 cents up at $43.54.
“Until traders see a sustained drop-off in the rate of demand destruction, the market will have a hard time establishing a floor,” Jonathan Kornafel, Asia Director of Hudson Capital Energy, said. “From a credibility standpoint, OPEC has no choice but to bite the bullet for the next few months.”
Some doubt OPEC, whose third production cut since September has brought its total reduction to over 4 million bpd or 5 percent of world supply, will fully implement the newly agreed cuts, further weighing on prices. “We believe that full implementation of the cuts is unlikely,” said Goldman Sachs analysts in a note to clients.
But OPEC President Chakib Khelil said on Friday he believed oil prices had found a floor around current levels. “I don’t believe there is any reason for it to fall any further. I don’t see it going lower,” he told Reuters in London. – Agencies