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Oil prices extend losses

LONDON: Oil prices extended losses in Wednesday to six-year lows on expectations that US crude stockpiles will rise further, in a market already awash with supplies, analysts said.

The New York price slid to $42.05 a barrel — the lowest level since March 2009. US benchmark West Texas Intermediate for delivery in April later stood at $42.24, down $1.22 a barrel compared with Tuesday’s close.

Brent crude for May delivery was down 45 cents to $53.06 a barrel in London midday deals.

“We expect the US stockpiles to increase further and this will exacerbate the market’s supply concerns,” said David Lennox, resource analyst with Fat Prophets trading group.

A Bloomberg News survey showed US crude stockpiles are expected to have increased by 3.3 million barrels to another record 452.2 million in the week ending March 13.

The US Energy Information Administration will release the official figure later Wednesday.

US stockpiles have risen for nine weeks in a row, each time touching a record, helping push prices lower in a market already weighed down by a supply glut after the OPEC oil cartel decided in November to maintain elevated output levels.

World oil prices have collapsed by about 60 percent since June as supply outpaces demand.

Lennox said the gloomy market outlook will only shift if the Organization of the Petroleum Exporting Countries (OPEC) — which is dominated by Saudi Arabia and other Gulf countries — decides to slash production.

“At the moment we are keeping our eyes on OPEC,” he said, adding: “They have a meeting in June and we are hopeful they will decide to cut production.” (AFP)

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