Oil Prices To Finish 2014 On A Low

Crude oil prices looked set to finish the year posting their largest annual decline since 2008 on Wednesday as the growing supply glut continued to weigh on prices. Brent crude oil traded at $62.10 at 10:00 GMT as the deteriorating global economy led investors to believe that demand would continue to lag behind supply well into the new year.

Chinese factory activity data out on Wednesday put further pressure on prices as investors saw the world’s second largest oil consuming nation’s economy struggling to regain traction. The Wall Street Journal reported that China’s HSBC manufacturing PMI was down to 49.6 in December. The figure fell below the 50 mark that separates contraction and expansion, suggesting that the economy continued to slow through the fourth quarter. The contraction marked the first time China’s manufacturing sector has declined in seven months.

Meanwhile, oil supplies are expected to continue rising despite conflicts in OPEC producer Libya. Though the North African nation’s violent clashes have resulted in damage to its refinery and reduced output, analysts still see overall global supplies increasing through 2015. 

Moving forward, investors will be focused on US inventory data for a better idea of US oil stocks. On Tuesday, the American Petroleum Institute reported that US crude inventories increased by 760,000 barrels last week, a far cry from expectations of a 100,000 barrel decline. Later in the day on Wednesday, the Energy Information Administration will release its own, more closely watched, version of the same report to confirm or challenge Tuesday’s figures.