Oil plunges to 7-year low

SINGAPORE: Oil prices hovered near their lowest in almost seven years in Asia Tuesday ahead of the release of US crude inventories and expectations of an increase in US interest rates.

The decision by the OPEC oil producers grouping last week to maintain its lofty production levels continues to weigh on a market already awash with supplies as traders fix their sights on other developments that could influence prices.

US benchmark West Texas Intermediate (WTI) for January delivery was up 16 cents at US$37.81 and Brent crude for January was trading 26 cents higher at US$40.99 at around 0240 GMT.

WTI fell 5.8 percent to US$37.65 in New York and Brent tumbled 5.3 percent to US$40.73 in London on Wednesday, their lowest levels since February 2009.

Analysts said Tuesday's slight rebound reflected some bargain-hunting ahead of the release on Wednesday of US commercial crude stockpiles, which will help gauge demand in the world's top oil consumer.

A Bloomberg News survey estimated inventories probably rose for an 11th week, indicating softer demand.

Traders are also closely watching a meeting of the US central bank's Federal Open Market Committee (FOMC) next week amid expectations members will announce the first interest rate hike in over nine years.