2014.12.0223:20:31UTC+00Crude oil recovers after losses on OPEC inaction deemed excessive

Global oil benchmarks West Texas Intermediate and Brent advanced for the second time in three days behind outlook that the decline caused by the Organization of Petroleum Exporting Country’s decision to not reduce its production levels was deemed excessive.

Futures for Brent, the European benchmark, with a delivery date in January rose by as much as 1.3%, or 92 cents, for a price per barrel of $7.46. It was trading early afternoon Sydney time at $71.21 in London’s ICE Futures Europe exchange. It lost $2 yesterday when it hit $70.54. Brent held a premium over WTI of $3.45 and has fallen by 36% so far this year.

WTI, the American benchmark, for delivery in January increased by as much as 1.6%, or $1.09, for a price per barrel of $67.97. It fell yesterday by $2.12 to $66.88. Trading volume was 55% less than the 100 day average.

Both benchmarks retreated by 18% last month after the OPEC decided to keep its current daily quota of 30 million barrels, choosing instead to use lower prices to limit supplies of US shale. Prince Turki Al-Faisal, the former intelligence head of Saudi Arabia, said that the kingdom will not be giving up its market share.

Chief investment officer Jonathan Barratt from Sydney’s Ayers Alliance Securities says that, “There’s a bit of profit taking as people assess the risks and what may unfold. Trading will continue to be volatile.”

Data from the American Petroleum Institute shows that inventories of crude oil in the US, the largest consumer of oil in the world, decreased by 6.5 million barrels last week. A separate government report from the Energy Information Administration is expected to show that stockpiles grew by 1.75 million, based on the results of a Bloomberg News survey.