Oil Trades Near 12-Year Low as US Surplus Seen Worsening
Oil rose from the lowest close in more than 12 years in New York as volatility climbed amid speculation that prices have fallen too fast.
West Texas Intermediate futures reversed an earlier loss of 3.2% that dragged the U.S. benchmark near $30 a barrel. The CBOE Crude Oil Volatility Index, a gauge of anticipated swings in U.S. crude prices, closed Jan. 12 at the highest level since February.
The relative strength index for Brent, the European reference price, slipped to 24.9, below the 30-point threshold that suggests prices have fallen too rapidly.
“Sometimes the price falls faster than markets expect, and then we see some price correction,” said Abhishek Deshpande, an analyst at Natixis SA in London. “But it will fall again. I don’t see any particular change in fundamentals.”
West Texas Intermediate for February delivery fell $1.75 to $31.41 on Jan. 11, the lowest close since December 2003. Prices lost 30% last year.
