Oil posted the longest run of weekly losses since August 2015 as OPEC member Libya restored production and the surplus in the US shows little sign of abating.
While futures rose 0.6 percent in New York on Friday, they are down 2.4 percent for the week, a fourth straight decline.
US inventories fell less than forecast last week, keeping supplies more than 100 million barrels above the five-year average, according to data from the US Energy Information Administration on Wednesday.
Libya, exempt from the OPEC-led deal to cut supply, will boost output to 1 million barrels per day by the end of next month, according to the country’s National Oil Co.
Oil slumped to the lowest close in seven months this week as concerns grew that rising US supplies will offset the production curbs by OPEC and allies, including Russia.
New non-OPEC output next year will be more than enough to meet demand growth, the International Energy Agency said on Wednesday in its first forecast for next year.
Current prices reflect fundamentals, said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
“Inventory levels remain stubbornly high,” he said. “The reality is, the things that have caused this trading range remain in place. Nothing’s changed.”
West Texas Intermediate (WTI) for next month delivery settled at US$44.74 per barrel on the New York Mercantile Exchange, down 2.4 percent for the week. The contract lost US$0.27 to US$44.46 on Thursday, the lowest since Nov. 14 last year.
Brent for August settlement on Friday rose US$0.45 to settle at US$47.37 per barrel on the London-based ICE Futures Europe exchange. Prices are down 1.6 percent this week. The global benchmark crude traded at a premium of US$2.40 to August WTI.
“There is really no bullish twist to the latest US data,” said Michael Dei-Michei, head of research at Vienna-based consultants JBC Energy GmbH. “Implied crude production seems to have moved upward at a rather rapid pace, US gasoline demand has taken a turn to the downside just as the summer driving season starts and total US oil stocks have not drawn for two weeks.”
Libyan output will reach 900,000 barrels per day within days, National Oil Co said on its Web site, citing chairman Mustafa Sanalla.
OPEC production jumped last month as Libya and Nigeria revived supply halted by attacks and political crises, a report from the group showed on Tuesday.
Oil market news:
‧ Canada’s oil-sands is to increase production rapidly in the next three years, ranking only behind US shale as the biggest contributor to global supply growth.
‧ Even if crude stockpiles drop in the next six months, concerns might shift, Bank of America Merrill Lynch said in a report, forecasting oil in New York will trade at US$47 per barrel by the end of the second quarter.
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