NEW YORK CITY - Oil fell to around $37 a barrel on Monday, trading within sight of an 11-year low, pressured by excess supply that has led to prices more than halving since the downturn began in mid-2014, Reuters reported.
U.S. crude was trading above global benchmark Brent, having earlier in December risen to a premium for the first time in about a year following the lifting of a 40-year-old ban on most U.S. crude exports.
Brent crude was down 88 cents at $37.01 a barrel. It fell to $35.98, an 11-year low, on Tuesday. U.S. crude was down 97 cents at $37.13. Trading volume was lighter than normal due to a British public holiday.
"We expect both prices to rise next year," said Eugen Weinberg, an analyst at Commerzbank. "A short-term slide can't be excluded, due to persisting over-supplies, negative sentiment and stronger downside momentum."
Figures from OPEC imply a glut of more than 2 MMbbl/d, equal to over 2% of world demand. Oversupply is expected to persist into the earlier part of next year.
"The global supply and demand tables are still showing a heavy picture for the first half of 2016," said Olivier Jakob, oil analyst at Petromatrix.
Signs on Monday that a further demand stimulus from low crude prices may be limited also added pressure.
In Japan, total oil product sales in November fell to a 46-year low. In Europe, demand growth for oil products turned negative in October, analysts at JBC Energy said in a report, citing figures from the Joint Organisations Data Initiative - the first year-on-year decline this year, JBC said.
The drop in prices gained impetus after OPEC, led by top exporter Saudi Arabia, a year ago dropped its longstanding policy of cutting output to support prices in favor of defending market share.
While the price collapse has partly achieved OPEC's goals by curbing growth of competing supplies, it has put finances in producing nations under more strain, even in the relatively wealthy Gulf states.
Saudi Arabia on Monday announced plans to shrink a record state budget deficit with spending cuts and a drive to raise revenues from sources other than oil.
The government of the world's top oil exporter ran a deficit of $97.9 billion in 2015.
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