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Oil set for weekly drop as resilient supply seen sustaining glut
[TOKYO] Oil headed for a weekly loss on speculation a global crude glut will persist as disrupted supply returns and demand growth slows.
Futures fell 0.5 per cent in New York, extending a weekly decline to 4.8 per cent. Opec members Libya and Nigeria, whose supplies have been reduced by domestic conflicts, are preparing to boost exports within weeks. The oil surplus will last longer than previously thought as demand growth slumps and output proves resilient, the International Energy Agency said Tuesday.
Oil has fluctuated since rallying in August amid speculation the Organization of Petroleum Exporting Countries and Russia would agree on measures to stabilise the market at a meeting in Algiers later this month. All 14 member countries will attend the Sept 27 meeting, according to an official with knowledge of the plans.
"We have some fairly hard support at US$40 and some fairly tough resistance at US$50. There is a pinball effect between those two bands," said Michael McCarthy, a chief market strategist at CMC Markets.
"I don't think many oil traders are expecting anything to come from Opec." West Texas Intermediate for October delivery fell 23 US cents to US$43.68 a barrel on the New York Mercantile Exchange at 11:04am in Tokyo.
Prices on Thursday gained 0.8 per cent to close at US$43.91 a barrel. Total volume traded was about 29 per cent below the 100-day average.
Brent for November settlement fell as much as 0.8 per cent to US$46.23 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 74 US cents, or 1.6 per cent, to settle at US$46.59 on Thursday. The global benchmark traded at a US$2.05 premium to WTI for November delivery.
Libya's state oil company on Wednesday lifted curbs on crude sales from the ports of Ras Lanuf, Es Sider and Zueitina, potentially unlocking 300,000 barrels a day of supply.
In Nigeria, Exxon Mobil Corp was said to be ready to resume shipments of Qua Iboe crude, while a second Nigerian grade operated by Royal Dutch Shell Plc is scheduled to restart about 200,000 barrels a day of flow within days.
World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA. Just last month the agency predicted the market would return to equilibrium this year.
The Alberta Energy Regulator approved 3 new oil sands projects totaling 95,000 barrels a day of output, the provincial government said in an e-mailed release.
Noble Energy Inc and Marathon Oil Corp are weighing bids for Silver Hill Energy Partners, a Permian Basin explorer that could fetch more than US$2 billion in a sale, according to people familiar with the matter.