Investing.com - Oil prices were little changed on Tuesday, one day after plunging more than 3% amid ongoing concerns over a global supply glut.
Trading volumes are expected to remain light in the final few days of the year as many traders already closed books due to the holiday period, reducing liquidity in the market which could result in exaggerated moves.
Crude oil for delivery in February on the New York Mercantile Exchange inched up 6 cents, or 0.18%, to trade at $36.88 a barrel during European morning hours. A day earlier, U.S. oil futures tumbled $1.29, or 3.39%.
Nymex oil futures are down nearly 30% in 2015 amid worries over ample domestic supplies. Prices fell to $34.29 earlier this month, the lowest since February 2009.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 2.5 million barrels in the week ended December 25.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery tacked on 4 cents, or 0.11%, to trade at $36.66 a barrel. London-traded Brent futures plunged $1.27, or 3.35%, on Monday.
Brent oil prices are on track to post an annual decline of 36% this year, as oversupply concerns dominated market sentiment for most of the year. Prices slumped to $35.98 on December 22, a level not seen since July 2004.
Oil futures have fallen sharply this month after the Organization of the Petroleum Exporting Countries failed to agree on output targets to reduce a glut of oversupply on global energy markets.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share.
Meanwhile, Brent's discount to the West Texas Intermediate crude contract stood at 22 cents, compared to a discount of 19 cents by close of trade on Monday.
U.S. crude has been firmer relative to Brent recently, on signs that the U.S. oil market is likely to grow tighter following Congress' decision to lift a 40-year old ban on domestic oil exports, while a global glut gets worse in 2016 due to soaring production in Saudi Arabia and Russia.
Oversupply issue will be exacerbated further once Iran returns to the global oil market early next year after western-imposed sanctions are lifted. Analysts say the country could quickly ramp up production by around 500,000 barrels, adding to the glut of oil that has sent prices tumbling.