Oil prices bounce but stuck near 2017 lows on supply overhang
Soaring US output also weighs on market
LONDON: Oil prices edged up from 2017 lows on Friday but remained on track for a fourth consecutive week of losses because of excess supplies, despite production cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
Brent crude futures were up 57 cents at $47.49 per barrel by 1224 GMT. US West Texas Intermediate (WTI) crude futures were at $44.85 per barrel, up 39 cents.
Oil prices are more than 12 percent below where they were in late May when producers led by OPEC extended for nine months a pledge to cut output by 1.8 million barrels per day (bpd). The cuts had been due to end this month and will now run until March.
Rising US oil output has undermined the impact of OPEC-led cuts.
Data from the US Energy Information Administration (EIA) this week showing growing gasoline stocks and shaky demand, despite the peak summer driving season, sent prices tumbling.
“It is going to be difficult to have a rally unless there is a disruption or some news from OPEC,” said Olivier Jakob, managing director of PetroMatrix.
Recovering production from Libya and Nigeria, both of which were exempt from OPEC cuts, and high exports and production from Russia were also contributing to the glut.
Top producer Russia, not an OPEC member but which signed up to the cuts, is expected to export 61.2 million tons of oil via pipelines in the third quarter, equivalent to about 5 million bpd, against 60.5 million tons in the second quarter, according to industry sources and Reuters calculations.
In the US, which is not participating in the deal to reduce production, oil output has risen more than 10 percent in the past year to 9.3 million bpd. The EIA expects that to rise above 10 million bpd in 2018.
“Oil is unlikely to find solace into the weekend...” said Jeffrey Halley, a senior market analyst at futures brokerage OANDA in Singapore.