EghtesadOnline: Oil prices edged lower on Friday, on course for the biggest weekly drop in a month, over doubts that an OPEC-led production cut will restore balance to an oversupplied market.
Front-month Brent crude futures were at $52.87 a barrel, down 12 cents from their last close and set for a 5.4% weekly drop, the most since the week of March 10. Front-month US crude futures, which rolled over on Friday, were at $50.61 a barrel, down 10 cents and on course for a 4.8% weekly decline, also the most since March 10, CNBC reported.
Both oil benchmarks fell this week as doubts emerged over the effect of the OPEC/non-OPEC production cut by almost 1.8 million barrels per day during the first half of the year.
Thomson Reuters data shows that a record 48 million bpd of crude is being shipped across ocean waters in April, up 5.8% since December, Financial Tribune reported.
The market is taking note: The value of the Brent forward curve has slumped steadily since the start of the OPEC-led cuts in January.
Some producers that are not involved in the supply-curbing pact have increased exports.
“The resurgence of US shale continues to sabotage efforts to stabilize the saturated markets,” said Lukman Otunuga of futures brokerage FXTM. US output has jumped almost 10% since mid-2016 to 9.25 million bpd, close to that of the world’s top two producers, Saudi Arabia and Russia.
The chief executive of France’s Total warned this week that prices could fall further due to rising US production.
“The cut, even if it’s extended, is not going to make much difference,” said Sukrit Vijayakar, director of energy consultancy Trifecta. He pointed to elevated crude stocks as the main reason for oversupply.