Oil prices dip on persistent fuel supply overhang
On Friday, crude prices sagged during early trade, as the market refocused on a constant fuel supply overhang, which is not supposed to abate unless OPEC along with other producers makes a considerable cut to their output.
US West Texas Intermediate crude futures were worth $44.40 a barrel, down 0.6%, from their previous settlement, with a stronger greenback also weighing on oil prices. International Brent crude oil futures sank 0.4%, trading at $45.67 a barrel.
Traders told that an everlasting crude as well as refined product supply overhang, which has dogged markets for over two years, was weighing on crude markets.
Crude prices headed south as the focus returned to supply growth. The IEA thinks that prices might keep retreating amid relentless supply growth unless OPEC makes considerable supply cuts.
In 2017, the supply overhang could run into a third year without a production cut from the Organization of the Petroleum Exporting Countries, while escalating output from other exporters could generate relentless supply growth, as the International Energy Agency told on Thursday.