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At noon, Brent crude oil futures were trading at $37.39, up by more than 50 cents from a day earlier but still down around 30 per cent year on year.
While North American and European markets will remain closed on Friday, there is expected volatility in energy markets in the first week of 2016 as they react to a late Wednesday report from the US government that crude stockpiles are over-saturated.
In a recent report, global investment firm Goldman Sachs warned that with supply far outpacing demand storage facilities are at near saturation points.
“Distillate storage utilization in the U.S. and Europe is nearing historically high levels, following near record refinery utilization, only modest demand growth (especially relative to gasoline), and increased imports from the East on refinery expansion and Chinese exports,” the report said.
Markets are also rattled by news that Iran will quickly flood the markets with an additional one million barrels a day as soon as economic sanctions are lifted.
Major oil producers such as Chevron, Exxon, Texaco, ConocoPhilips, and others are also beginning to worry as they see their profits slashed.
Shares of Chevron were down one per cent at $89.21 on Thursday, while Exxon fell 0.7 perc ent to $77.61.
At press time, oil worries had pulled the S&P 500 down 0.63 per cent to 2,050, marking an overall 0.3 per cent decline for 2015.
The Dow Jones Industrial average was down 0.58 per cent to 17,501.59 – a decrease of 1.8 per cent from January 1, 2015.
On the other hand, the Nasdaq Composite – which fell 0.42 per cent at press time on Thursday – still managed to end the year on a high note, having risen 6.8 per cent overall.
The BRICS Post with inputs from Agencies