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Oil resumes slide after brief rebound on short-covering

Published 18/12/2014, 17:06
© Reuters. A man refuels a vehicle next to a pricing quotation board at a petrol station in Tokyo
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By Barani Krishnan

NEW YORK (Reuters) - Global crude prices fell again on Thursday, a day after a short-covering rally, as traders placed new bets that the market would resume a six-month rout on worries about a supply glut.

In early trade, oil extended gains from the previous session, when short-covering lifted prices more than $3 (2 pounds) a barrel.

But in late morning trade in New York, benchmark Brent and U.S. crude fell more than $1 a barrel to session lows. They then retraced some losses, with Brent down around $60 a barrel while U.S. crude was down near $55.

"We're continuing to search for a bottom, and might even see another significant drop before the year-end," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

Traders also cited a Bloomberg report that a Nigerian port workers union had suspended a strike. Reuters has not verified the report, and oil shipments did not appear to be affected. The dock workers union is only involved in container shipping in Lagos, not oil ports.

Separately, the OPEC country's two major oil worker unions will meet with the government on Thursday to discuss an end to a strike that began on Monday. So far the strike has not affected oil exports, they have said.

Brent's front-month contract was down 93 cents at $60.29 by 11:27 a.m. EST (5:27 p.m.), after a session low at $59.86. It lost about $1.25 earlier, in a span of twenty minutes.

© Reuters. A man refuels a vehicle next to a pricing quotation board at a petrol station in Tokyo

U.S. crude fell 85 cents to $55.62, having earlier fallen to $55.28.

(Additional reporting by Catherine Ngai in New York and David Sheppard in London; Editing by Michael Urquhart and David Gregorio)

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