SINGAPORE (Reuters) – Oil prices fell to 2018 on Friday in the narrow but volatile trade, triggered by concerns about…
SINGAPORE (Reuters) – Oil prices fell to 2018 on Friday in the narrow but volatile trade, triggered by concerns about a growing global supply overhang with a gloomy economic point of view.
PHILPHOTO: A pumpkin lease owned by parsley Energy works at sunset in the Permian Basin near Midland, Texas USA on August 23, 201
8. REUTERS / Nick Oxford / File Photo
Also, an expectation that the organization of the Producer Group for oil-producing countries (OPEC) will start supplying supply in 2019 to clean up any lubricants given little support, said traders.
International benchmark Brent crude oil futures LCOc1 hit their lowest since December 2017 at $ 61.52 per barrel before recovering at $ 62.10 per 0430 GMT. It was still 50 cents, or 0.8 percent during their last closing.
US. West Texas Intermediate (WTI) raw futures CLc1 fell by more than 2 percent, to $ 53.35 a barrel, after reaching 5 cents in October 2017, low reached earlier this week.
At the end of November, the burn and WTI price volatility increased in November to approach levels not seen since the 2014-2016 market decline and, for that, the 2008-2009 financial crisis.
(Graphic: Oil Price Volatility Has Increased – T.nr.RS/2PO4r3S)
Divergence between American and International Commodities comes as a growing North American supply is clogged the system and depressing prices there, while global markets are slightly faster – partly due of reduced exports from Iran due to recently introduced US sanctions.
Overall, global oil supply has increased this year, while the three largest manufacturers in the US, Russia and Saudi Arabia pump out more than one third of global consumption, which is around 100 million barrels per day (bpd).
High output comes as demand outlook weakens behind global economic slowdown.
Oil prices have fallen by about 30 percent since the last peaks in early October, when global production began to exceed consumption in the fourth quarter of this year, ending an underperformance period beginning in the first quarter of 2017, according to data in Refinitive Eikon.
Adjustment to lower demand, said superior raw exporter Saudi Arabia on Thursday that it could reduce supply.
“We will not sell oil that customers do not need,” said Saudi energy minister Khalid al-Falih to reporters.
Saudi Arabia drives OPEC to reduce oil supply by as much as 1.4 million bpd to prevent delivery gluten.
The group officially meets on December 6th to discuss its supply policy.
US. Bank Morgan Stanley said it saw “a much higher probability of OPEC reaching an agreement to balance the market 2019”, not adding that this would probably support oil prices “in the high 50s, at least near the term”.  (Graphic: Global Crude Oil Production and Demand Balance – tmsnr.rs/2PKtzIy
Reporting by Henning Gloystein; Editing Sherry Jacob-Phillips and Richard Pullin