Oil falls to lowest since late 2017 on emerging supply glut
SINGAPORE: Oil prices plunged to their lowest since late 2017 on Friday in choppy trading, weighed down by an emerging crude supply overhang and a darkening economic outlook.
To counter bulging supply, the Opec is expected to start withholding output after a meeting planned for December 6.
International benchmark Brent crude oil futures fell their lowest since December 2017 at $61.52 per barrel, before recovering to $62.13 by 0741 GMT. That was 47 cents, or 0.8 per cent below their last close.
US West Texas Intermediate (WTI) crude futures slumped 2.3 per cent, to $53.38 a barrel. Prices earlier fell to as low as $52.82, only 5 cents about the $52.77 level reached on Tuesday, which was the lowest since October 2017.
Amid the plunge, Brent and WTI price volatility has jumped in November to approach levels not seen since the market slump of 20142016 and, before that, the financial crisis of 2008-2009.
The divergence between US and international crude comes as surging North American supply is clogging the system and depressing prices there, while global markets are somewhat tighter, in part because of reduced exports from Iran due to newly imposed US sanctions.
Overall, however, global oil supply has surged this year, with the top-three producers — the United States, Russia and Saudi Arabia — pumping more than a third of global consumption, which stands at around 100 million barrels per day (bpd).