Oil on Friday fell for a fifth week after slipping into a bear market on concern that rising production from the US to Libya will offset cuts from OPEC and its allies.
Futures regained some lost ground, but closed nearly 4 percent lower for the week.
US crude output is expanding as shale drillers keep adding rigs, Libya is pumping the most in four years and oil stored in tankers rose to this year’s high earlier this month.
A committee tasked with monitoring compliance to the OPEC-led deal gave only cursory attention to the possibility of deepening existing curbs, said delegates familiar with the meeting this week.
“It’s becoming bearish mania. I think they’re overdoing it,” Chicago-based Price Futures Group Inc senior market analyst Phil Flynn said. “If we keep going down, we’re not going to be adding rigs in a few months, we’re not going to be adding production.”
Oil in New York and London tumbled into a bear market this week on concerns that expanding global supply will counter reductions from OPEC and partners including Russia.
Shale drillers added oil rigs for a record 23rd straight week as a growing backlog of unfinished wells — and the crude that will eventually flow from those projects — threatens to add to the global glut.
West Texas Intermediate for August delivery settled at US$43.01 per barrel, up US$0.27, on the New York Mercantile Exchange.
Prices have fallen 21 percent from their peak in February; a bear market is defined as at least a 20 percent drop.
Brent for August settlement closed at US$45.54 per barrel on the London-based ICE Futures Europe exchange, up US$0.32.
The global benchmark crude traded at a premium of US$2.53 to West Texas Intermediate.
US oil production last week rose by 20,000 barrels per day to 9.35 million, the US Energy Information Administration reported on Wednesday.
While crude stockpiles slid by 2.45 million barrels to 509.1 million, a steeper decline than forecast in a Bloomberg survey, inventories remain about 100 million barrels above the five-year average.
“It’s very difficult to see at what point in time the original objective of this OPEC/non-OPEC agreement can be reached,” Wellington, Florida-based Energy Analytics Group LLC director Thomas Finlon said by telephone. “It’s a finish line that is getting farther and farther away.”
A Saudi Arabia-led bloc has presented steep demands to end the Qatar crisis, including cutting back diplomatic ties with Iran, one Persian Gulf official said.
Abu Dhabi oil buyers have gotten approval to co-load Qatar crude, lifting one of the shipping restrictions imposed earlier this month, people with knowledge of the matter said.
Shipping and energy operations in the Gulf of Mexico were getting back to normal after Tropical Storm Cindy weakened, with Houston and Galveston-Texas City ship pilots resuming operations.
In other commodities, gold rose US$7 to settle at US$1,256.40 per ounce, while silver added US$0.14 to US$16.65 per ounce and copper rose US$0.03 to US$2.62 per pound.
Heating oil was close to flat at US$1.37 per gallon and wholesale gasoline was little changed at US$1.43 per gallon.
Additional reporting by AP
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