Brent, WTI Prices Slide on Oversupply Concerns

Brent, WTI Prices Slide on Oversupply ConcernsBrent, WTI Prices Slide on Oversupply Concerns

Oil prices fell on Friday as markets digested big swings earlier in the week that have left both major benchmarks facing a second weekly loss and largely shrugged off a warning about tightness in spare capacity.

Brent crude dropped 35 cents, or 0.5%, to $74.10 a barrel. On Thursday it gained $1.05 a barrel, rebounding from a session low of $72.67. It is heading for a weekly fall of nearly 4%, CNBC reported.

US benchmark West Texas Intermediate crude edged down 12 cents to $70.21 a barrel, after falling 5 cents in the previous session. It is heading for a weekly decline of nearly 5%.

It has been a wild week for oil prices with both the main benchmarks suffering heavy losses on Wednesday, as traders focused on the return of Libyan oil to the market amid concerns about a China-US trade war.

However, a warning on spare capacity by the International Energy Agency pushed Brent higher on Thursday, helping it recoup some losses.

“It is a tough market,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo. “I think it is supported by relatively strong demand and inventories are falling, but if you look a little bit ahead, US shale oil just continues to grow and then it depends on what goes on with OPEC.”

The Organization of Petroleum Exporting Countries and other key producers, including Russia have responded to the recent market tightness by easing a supply-cut agreement.

IEA cautioned that the world’s oil supply cushion “might be stretched to the limit” due to production losses in several countries.

The Paris-based IEA said in its monthly report that rising production from Middle East Persian Gulf countries and Russia comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit.


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