US oil prices under pressure after hitting six-year low – MarketWatch

U.S. oil prices were marginally lower in Asian trade Tuesday after sinking to a six-year low overnight on worries about a supply glut, while Brent crude prices remained volatile.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April CLJ5, -1.07%  traded at $ 43.81 a barrel, down $ 0.07 in the Globex electronic session. It had fallen to its lowest close since March 11, 2009 in the previous trading session.

May Brent crude on London's ICE Futures exchange rose $ 0.03 to $ 53.97 a barrel.

"The current [oil] surplus on top of already high U.S. inventories is proving a highly visible driver of short-term bearishness, not just in the U.S. but across the global oil market," Paul Horsnell, head of commodities research at Standard Chartered, said in a report.

He said U.S. crude inventories are likely to rise over coming weeks, and until they stabilise short-term oil prices will remain vulnerable. However, shale oil output is expected to start falling in April in three of the four main producing regions–Bakken, Eagle Ford and Niobrara, Horsnell said.

The American Petroleum Institute will publish its inventory data later Tuesday. The U.S. energy department's weekly update is due on Wednesday.

WSJ Market Wrap: March 16, 2015

(1:24)

U.S. stocks rose Monday, rebounding after three consecutive weeks of declines. A slight decline in the U.S. dollar and gains in European stocks contributed to the market's positive tone. Valeant revised its deal to acquire Salix.

The Organization of the Petroleum Exporting Countries said in its monthly oil report on Monday that the U.S. oil boom could be over by the end of this year due to spending cuts and fewer drilling rigs.

It said its oil production fell slightly in February from the previous month, due to volatile output in Iraq, Libya and Nigeria. But the small fall in OPEC's production still leaves a large supply glut in the market, Capital Economics said.

Meanwhile, investors are watching the U.S.-Iran nuclear talks for signs of progress and the two-day meeting of the Federal Open Market Committee which begins Tuesday.

Rising U.S. oil production has added to a growing sense of disappointment that non-OPEC output hasn't weakened as quickly and broadly as anticipated, analyst Tim Evans at Citi Futures said. "The demand side of the market also has yet to show any clear measurable signs of firming in response to lower prices," he said.

Nymex reformulated gasoline blendstock for April RBJ5, -0.62% —the benchmark gasoline contract—fell 17 points to $ 1.7256 a gallon, while April diesel traded at $ 1.7013, 27 points higher.

ICE gasoil for April changed hands at $ 515.50 a metric ton, up $ 5.75 from Monday's settlement.