Oil Up on Industry Cuts in Jobs, Spending

Crude prices rallied sharply on Thursday as news of deeper industry spending and production cuts revived buying.

View of the logo of French oil giant Total in front of the oil refinery of Donges, near Nantes, in this December 20, 2013 file photo - Sputnik International
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Oil prices have resumed their upward trajectory after falling back on Wednesday against the backdrop of a report on growing US crude oil inventories.

Brent crude for April delivery was up 4.37% at $57.05 per barrel, while March WTI futures edged up 0.43% to close at $51.43 per barrel.

France’s energy major Total said Thursday it would slash 2,000 jobs by 2017 and sell $5.5 billion worth of company stock this year due to the volatile situation on the oil market.

Earlier this month the Texas oil and gas division of General Electric unveiled a plan to lay off 45% of its staff.

Lariat Services Inc will fire 265 workers manning their Permian Basin oilfield in West Texas, while Trican Well Service Company is going to sack 125 workers and roll up their operations in Longview, Texas.

In January Royal Dutch Shell announced it would cut expenses by a whopping $15 billion.

Daniel Ang, investment analyst at Phillip Futures in Singapore, said dealers are wary about the impact of such cuts in the immediate term.

“We will continue to see range-bound trading in the immediate term with little change to fundamentals,” Ang told AFP.

“The main thing is crude production. As long as production levels don’t go down for now, it is hard to see a reversal of low oil prices. Markets seem to be ready for prices to go up again. They are just waiting for a sign that production will be significantly cut,” he said.

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