Oil ends on a low after halving in 2014 as OPEC stands aside

Wed Dec 31, 2014 6:27pm EST
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By Samantha Sunne

NEW YORK (Reuters) - Oil prices fell on Wednesday to a 5-1/2-year low and ended with their second-biggest annual decline ever, down by half since June under pressure from a global glut of crude.

Just before the close, Brent and U.S. oil futures bounced off session lows. But prices still settled at their lowest since May 2009. Weekly U.S. data showed crude oil stockpiles fell more than expected, but inventories at the oil hub at Cushing, Oklahoma, grew, keeping prices depressed.

Oil prices have collapsed this year as the Organization of the Petroleum Exporting Countries opted to maintain the same level of output despite a global glut caused by expanding U.S. shale output and diminished demand growth from China.

Phil Flynn, an analyst at Price Futures Group, said the mood was "sour" and trade choppy as dealers continued to hunt for a bottom, with volatility exacerbated by thin holiday volume.

"We are sowing the seeds for a rally down the road, but it doesn't look like any time soon," he said.

Brent settled down 57 cents at $57.33 a barrel, bouncing off an intra-day low of $55.81 but closing below $60 for a fourth straight day.

U.S. crude fell 85 cents to settle at $53.27 a barrel, down 45 percent from a year ago.

Trading seesawed as traders balanced positions for the new year and digested a mixed report on U.S. crude stockpiles from the Energy Information Administration [EIA].   Continued...

A flame shoots out of a chimney at a petro-industrial factory in Kawasaki near Tokyo December 18, 2014. REUTERS/Thomas Peter