Oil prices fall as three-day rally runs out of steam
Oil prices fell in trading on Friday as investors concerns about the global oversupply of crude outweighed optimism about OPEC supply cuts. ConocoPhillips photo.
Oil prices gained earlier in the week on optimism about OPEC deal extension
After three days of gains, oil prices fell in trading on Friday as investors concerned about the oversupply of crude after an updated rig count data from Baker Hughes showed US production is continuing to grow, adding to the global crude glut.
In Q1, prices were locked within a range as traders waited for signals that the OPEC supply cuts were affecting global supply or if increased US production offset OPEC’s efforts.
Reuters reports Brent crude futures have made the biggest losses across global asset classes this quarter. This month, contracts posted the largest monthly losses since last July due to growing US crude inventories and drilling activity undermined efforts to rebalance the market.
Brent crude futures ended the day down by 13 cents to $52.83. US crude futures were up slightly by 25 cents to $50.60/barrel, after slipping below $50/barrel earlier in trading.
Since the beginning of Q1, both contracts have lost about 7 per cent, the worst quarterly loss since late 2015.
“I wouldn’t be surprised to see some profit-taking ahead of the weekend after the strong gains in recent days,” Carsten Fritsch, commodity analyst at Commerzbank told Reuters.
“The expected rise in the U.S. rig count later today provides some arguments to sell at last.”
Monthly polling by Reuters shows analysts have lowered their oil price expectations for this year, despite efforts by OPEC and some non-cartel members to reign in production in an effort to reduce the global supply of crude.
Subscribe
If you enjoyed this article, subscribe to receive more just like it.
