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Oil markets remain weak as oversupply keeps biting

Published 09/09/2015, 11:20 am
Updated 09/09/2015, 11:27 am
© Reuters.  Oil markets remain weak as oversupply keeps biting
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* End of summer driving season pulls down U.S. demand

* Brent premium over WTO back over $3.50 a barrel

* Mexico says it can't cut output

By Henning Gloystein

SINGAPORE, Sept 9 (Reuters) - Crude oil prices remained steady but at low levels in early Asian trading on Wednesday as concerns remained that high global production was being met by increasingly slowing demand.

Oil prices have fallen almost 60 percent since June 2014 on a global supply glut, with prices seesawing in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets, while production remained near record highs.

The Brent global crude benchmark LCOc1 was trading at $49.52 per barrel at 0110 GMT, flat with its last settlement after having risen 4 percent the previous session on the back of an equity rally. U.S. West Texas Intermediate crude CLc1 , however, was slightly lower again, shedding 2 cents to $45.92 a barrel and continuing Tuesday's slide.

The diverging Brent/WTI moves of the past days have pulled the Brent premium away from January lows, and is now back over $3.50 per barrel.

"WTI prices lagged as the end of the U.S. summer driving season signals lower demand," ANZ said on Wednesday.

Overall, the bank said that "commodity price volatility remains high with markets trying to establish a new base against the headwind of weaker seasonal demand."

On the supply side, recent speculation that some producers were willing to cooperate in cutting output in support of prices was dealt a blow by Russia and Mexico this week, who both said they would not cut.

The Organization of the Petroleum Exporting Countries (OPEC) is producing close to record volumes to squeeze out competition, especially from U.S. shale producers, which have so far weathered the price plunges to keep pumping oil.

(Editing by Richard Pullin)

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