Oil settled up almost 3 percent on Friday after a weak U.S.jobs report hurt the dollar and boosted commodities, but crude prices still ended the week sharply lower on concerns about oversupply. The Brent crude futures contract for November delivery was trading at $45.89 per barrel-a gain of ~0.95%.
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Front-month October Brent settled at US$48.37 a barrel on August 30, up from $42.14 on August 1, and NYMEX WTI settled at $46.35 on August 30, up from $40.84 on August 1. On September 2, Adel al-Jubeir, Saudi Arabia’s foreign prime minister, said that he was expecting crude oil producers to take a common stance on oil production.
The Qatari Prime Minister expressed confidence that Barkindo would work closely with OPEC member countries to overcome the current challenges in the interest of all oil producers and consumers.
The market had dived Thursday after Russian Federation suggested it may not be necessary to limit output, denting hopes for its gathering with OPEC producers in Algeria later this month.
The visit is ahead of a meeting between OPEC members to be held in Algeria on September 26-28 on the sidelines of the International Energy Forum (IEF).
According to the Paris-based International Energy Agency’s July monthly oil report, an OECD inventory overhang continued to shift from crude into products during June, with commercial stocks swelling by 5.7 million barrels to a record 3.09 billion.
“If no adjustment to imports is made, then inventories of crude oil could [continue to] balloon”, said Tim Evans, a Citi Futures analyst.
On Wednesday, the USA government’s Department of Energy reported that commercial crude inventories in the world’s top oil consumer edged up last week and were now 16 per cent higher than the same period a year ago.
The surprise bigger-than-expected build in US crude inventories last week also prompted bears to leap in to action. However it kept in place its estimate that year-on-year, non-OPEC output will fall by 900,000 b/d in 2016. “The end of the US driving season and the prospect of building inventories create downward risk for the oil price and may see further pressure on energy stocks today”.
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Mriganka Jaipuriyar is associate editorial director, Asia & Middle East Oil News & Analysis.
