Oil pared losses in New York and London after OPEC Secretary-General Abdalla El-Badri said insufficient investment could push prices to $200 a barrel.
Futures fell 0.2 percent in New York, erasing an earlier decline of 2.7 percent from the lowest close in almost six years. El-Badri hopes the oil market will recover in a “reasonable time” and OPEC is open to talks with producers outside the group, he said in an interview in London today. U.S. inventories climbed to the highest level for December since 1930, the American Petroleum Institute reported.
Oil slumped almost 60 percent since June as the Organization of Petroleum Exporting Countries resisted calls to cut output and the U.S. pumped at the fastest pace in more than three decades. Drillers in the U.S. have begun to idle rigs as falling prices make wells aiming to tap shale reserves unprofitable.
“El-Badri’s comments sparked a little rally,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “We drilled it down very hard last night.”
West Texas Intermediate for March delivery dropped 14 cents to $45.45 a barrel in electronic trading on the New York Mercantile Exchange as of 9:27 a.m. local time. The contract lost 72 cents to $45.59 on Jan. 23, the lowest close since March 2009. The volume of all futures traded was 52 percent above the 100-day average for the time of day.
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