Oil Prices Slip

Oil prices slipped on Friday as the market refocused on a persistent fuel supply overhang that is not expected to abate unless OPEC and other producers cut their output significantly.

International Brent crude futures traded at $45.13 per barrel, down 70 cents from their last close. US West Texas Intermediate futures were down by 84 cents, or almost 2%, at $43.82 per barrel, Reuters reported.

Benchmark crude markets have in the past week wiped out the gains made since the end of September when the Organization of the Petroleum Exporting Countries said it would agree to cut oil production to shore up persistently low prices.

While investors were always skeptical that a deal to cut or freeze oil output could be reached and implemented at an OPEC meeting on Nov. 30, an increasing amount of data has underscored a global skew toward oversupply.

OPEC reported on Friday an increase in its output to another record high, pointing to an even larger surplus on the market next year. It said it pumped 33.64 million barrels per day last month, up 240,000 bpd from September.

“Oil markets are increasingly reflecting growing consensus that the persistent oversupply seen throughout 2016 will carry on into 2017,” analysts at JBC Energy wrote.

“We would actually go a step further, as while 2016 has seen a significant improvement from 2015 with easing oversupplies, 2017 will be worse again barring massive outages or OPEC action.”

Beyond oversupply, a surging dollar following the initial shock of Donald Trump’s US presidential election win also put pressure on prices, traders said.