The commodity has lost nearly half its value since June of this year.
Oil prices traded near five-year lows in thin year-end trade on Tuesday, as analysts predicted further bearishness in the market owing to rising U.S. production despite a global supply glut.
West Texas Intermediate for February delivery rose 15 cents to $53.76 while Brent crude for February gained 14 cents to $58.02 in mid-morning trade. WTI closed down $1.12 to $53.61 in New York while Brent fell 57 cents in London to $57.88. Both contracts last traded at those levels in May 2009.
“We are seeing light volumes in Asian trading … oil prices have once again touched new lows over longer term concerns about U.S. production levels,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “Bullishness is contained, and I think we will be seeing a consolidation pattern as we head to the close of the year,” he added.
Oil has shed about half its value since June, attributed to slowing growth in China and emerging-market economies, a recession in Japan and a near-stall in the eurozone. On top of that, the OPEC oil-producing cartel last month said it would maintain output levels despite ample global supplies, in part due to cheaper oil extracted from North American shale rock.
Analysts said traders were also girding for more downward pressure stirred up by the impact of a brewing Greek political crisis, expected poor numbers on China’s industrial sector, and another possible increase in U.S. stockpiles.
The U.S. Energy Information Administration will on Wednesday release stockpiles data for the week to Dec. 26.