Global oil market slides before weekend
World oil prices dropped Friday as investors locked in profits following a six-day rally, with a rise in OPEC’s output in March also adding to downward pressure, analysts said.
Brent North Sea crude for June delivery fell 38 cents to US$63.60 per barrel in midday London deals.
U.S. benchmark West Texas Intermediate for delivery in May sank 42 cents to US$56.68 a barrel.
“After a sustained increase in both the WTI and Brent over the past week, traders are selling ... and this has led to the downward pressure in prices we see today,” said analyst Daniel Ang at Phillip Futures in Singapore.
Prices rose for the sixth day running on Thursday — with WTI hitting its highest level since December — on news that U.S. shale output, which has contributed to a global supply glut, may be on the cusp of easing.
But Ang said the oversupply was unlikely to end soon due to strong production levels by the Organization of the Petroleum Exporting Countries (OPEC).
The 12-member OPEC, which pumps around a third of the world’s oil, saw its production in March rise by 810,000 barrels per day to average 30.79 mbpd, Ang said.
“OPEC’s high production numbers for March highlights that the global crude oversupply problem is still there,” he told AFP.
Crude prices collapsed more than 50 percent between June and January owing to the oversupply and weak demand.