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Oil prices fall as Opec production soars
[SINGAPORE] Oil prices fell in early trading on Friday, ending a run of rallies earlier in the week, after Opec said that its output surged in March, adding to a global glut.
The Organization of the Petroleum Exporting Countries (Opec) said that its March production jumped 810,000 barrels per day (bpd), to 30.79 bpd which is equivalent to a third of global supply.
Front-month Brent crude futures were down 15 cents since their last settlement to US$63.83 per barrel at 0047 GMT on Friday. US crude was down 20 cents at US$56.50 a barrel.
Thanks to dipping output from the United States and other rival producers due to oil prices halving since June last year, Opec said demand for its oil this year would be higher than previously thought. "The strategy of Opec to put pressure on the high-cost producers is working, but the individual members seem to have moved off that focus and are instead producing as much as they can," said Jamie Webster, analyst at IHS in Washington and an Opec expert.
Opec's report may reinforce the perception that major producers are staking out market share ahead of a potential rise in Iranian exports following its framework accord with world powers over its nuclear programme.
Friday's price fall at least temporarily ended a rally that has seen Brent gain over 16 per cent in value since the beginning of the month, triggered by Middle East conflict and a dip in US oil production.