Fears over excess supply hit oil prices

OIL PRICES fell for a sixth day on Friday, and were on track for their biggest weekly losses in 10 months, as record-high US crude output added to concerns about a sharp rise in global supplies.

The drop came amid a rout in global equity markets sparked by inflation fears.

Brent futures were down 64 cents at $64.17 a barrel. On Thursday, Brent fell 1.1 per cent to its lowest close since December 20.

US West Texas Intermediate (WTI) crude was down 90 cents at $60.25 a barrel, having settled down 1 per cent in the previous session, its lowest close since January 2.

Both contracts have fallen more than 9 per cent from this year’s high point in late January. Brent was heading for a weekly loss of more than 6 per cent, its biggest since April, while WTI’s weekly decline of nearly 8 per cent is the steepest since March.

“It has now become painfully clear for beleaguered oil bulls that the early-year rally was not justified,” PVM Oil Associates’ Stephen Brennock said. “In its place is a deepening price rout that has quashed any lingering pockets of optimism.”

US domestic crude production hit a record of 10.25 million barrels per day (bpd) for the most recent week, according to the US Energy Information Administration (EIA), while an outage on a key oil pipeline in the North Sea proved short-lived.