Comments
Oil edged further below $57 a barrel on Friday, pressured by evidence of ample supplies including the biggest jump in US inventories since 2001 and Saudi Arabian output reaching a record high.
Brent crude was still heading for a weekly gain, having rallied on Thursday in response to strong German economic data that lifted the oil demand outlook and easing concern about a rapid rise in Iranian oil supplies.
Brent crude slipped 5 cents to $56.52 a barrel by 0856 GMT, on track for its third weekly gain in four. US crude was down 42 cents at $50.37.
"Most of the fundamental factors are still pointing to lower prices," said Eugen Weinberg, analyst at Commerzbank. "At the moment, we have an oversupply of more than 1 million barrels per day."
The price of Brent has halved from $115 a barrel in June last year, a drop that deepened after OPEC refused to cut output, choosing to defend market share instead. Top exporter Saudi Arabia was the driving force behind the policy shift.
While some OPEC members are urging output cuts to boost prices, Saudi Arabia has shown no sign of a rethink. Oil Minister Ali al-Naimi told reporters on Tuesday Riyadh has boosted its crude production to 10.3 million bpd, the highest rate on record.
Further pressuring prices, a US government report on Wednesday said domestic crude stocks surged nearly 11 million barrels last week, the biggest gain in 14 years.
A glut of unsold Nigerian crude is building up too, traders say. This is particularly bearish for Brent, because Nigerian crude is priced against it.
Some support for crude came from doubts about how fast Iran can resolve a deal over its nuclear programme that would open the way to more oil sales.
Iranian Supreme Leader Ayatollah Ali Khamenei on Thursday demanded that all sanctions on Iran be lifted on the same day as any final agreement, while the US maintains its position that sanctions will only be removed gradually.
"If the agreement can be reached, it's likely to take a very long time and so the possibility of Iranian oil coming back to the oil markets any time soon is not as imminent as perhaps we were pricing two weeks ago," said Michael McCarthy of CMC Markets.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.