Oil up after five-year low in Brent; traders wary of more downside

Tue Dec 9, 2014 9:26pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Brent oil prices ended higher on Tuesday after touching a 5-year low and following five straight days of losses, while U.S. crude also rose as players looked for a sustainable price in a market haunted by oversupply concerns.

Sentiment in oil was aided somewhat by a weaker dollar, which boosted the value of commodities denominated in the currency, traders said.

Lower capital expenditures for next year planned by oil companies such as ConocoPhillips also helped as they indicated less drilling and production.

But fear of a further slide after a 40 percent drop in Brent's value since June kept market bulls away, analysts said.

New U.S. projections estimating a growth of more than 100,000 barrels per day in production by January from the big three U.S. shale plays also offset some of the positive impact from oil firms' planned capital expenditure reductions.

Brent's front-month futures contract settled up 65 cents, or 1 percent, at $66.84 a barrel. Earlier in the session, it fell to as low as $65.29, its weakest since September 2009. On Monday alone, Brent lost $2.88, or 4.2 percent, for its third-largest one-day loss this year.

U.S. crude futures finished up 77 cents at $63.82 a barrel, after swinging between a high of $64.20 and low of $62.25. It fell $2.79, or 4.2 percent, on Monday.

Both crude markets pared their gains in post-settlement trade after the American Petroleum Institute, an industry group, reported a 4.4 million barrel build in crude stockpiles last week.   Continued...

A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. REUTERS/Eric Gaillard