International oil prices fall amid supply glut, bleak economic outlook

File photo. Photograph:( Reuters )

Reuters New York, NY, USA Nov 23, 2018, 09.12 AM (IST)

Oil markets remained weak on Friday, pressured by concerns that producers are churning out more oil than the world needs amid a bleak economic outlook.

US West Texas Intermediate (WTI) crude futures CLc1, were at $54.07 per barrel at 0204 GMT, down 56 cents, or 1 per cent, below their last settlement.

Front-month Brent crude oil futures LCOc1 were at $62.64 per barrel, 4 cents above their last close amid thin trading due to a holiday in Japan.

“Oil prices fell as concerns of further oversupply drove sentiment lower,” ANZ bank said on Friday.

Brent may revisit its November 20 low of $61.71 per barrel in the near-term, Reuters technical commodity analyst Wang Tao said.

Oil supply has surged this year, with the top-three producers of the United States, Russia and Saudi Arabia pumping out more than a third of global consumption, which stands around 100 million barrels per day (bpd).

High production comes as the demand outlook weakens on the back of a global economic slowdown.

Oil prices have plunged by around 30 per cent since their last peaks in early October, as global production started to exceed consumption in the fourth quarter of this year, ending a period of undersupply that started in the first quarter of 2017, according to data in Refinitiv Eikon.

Adjusting to lower demand, top crude exporter Saudi Arabia said that it may reduce supply.

“We will not sell oil that customers don’t need,” Saudi Energy Minister Khalid al-Falih said.

Saudi Arabia is the de-facto leader of the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), which is discussing to cut oil supply by as much as 1.4 million bpd to prevent a supply glut.