Published: Sat, July 06, 2019
Money | By Ethel Goodwin

Oil prices edge down, pressured by USA supply

Oil prices edge down, pressured by USA supply

(MENAFN - Oil prices erased some of the gains on Wednesday after US inventory data showed a smaller-than-forecast decline.

Brent crude futures LCOc1 settled at $64.23 a barrel, up 93 cents, or 1.47%.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 47 cents or 0.82% at $56.87 per barrel.

Oil is down for the week after plunging 4.8 percent on Tuesday, its worst decline right after an OPEC meeting in more than four years. "We do think there is still a significant amount of upside risk in prices considering that Iran-U.S. tensions are at a boil".

Futures in NY closed down 1.6 per cent for the week, despite eking out an increase Friday after the government said payrolls climbed by 224,000 in June.

Oil is set for the biggest weekly decline since May as global demand concerns outweighed an OPEC+ pact to extend supply curbs into 2020 and worries that a renewed confrontation with Iran may threaten supplies.

Yet, we have not seen major shifts in the supply and demand balance in recent months, suggesting that swings in market sentiment have been the primary driver of prices.

For the record, the Saudis - which have repeatedly chastised crude analysts for focusing too much attention on the often erratic behaviour of crude traders - pumped 9.78 million barrels per day (bpd) in June, up from 9.67 million bpd in May; this is below its target of 10.3 million bpd under the OPEC-led global oil reduction pact. There was no settlement Thursday due to a holiday in the U.S., so all transactions were booked on Friday. New orders for U.S. factory goods fell for a second straight month in May, government data showed on Wednesday, adding to the economic concerns.

German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe's largest economy was likely to remain weak in the coming months.

The Organization of the Petroleum Exporting Countries and allied producers such as Russian Federation, known as OPEC+, supported prices by extending their deal on supply cuts.

Gibraltar officials and a group of British Royal Marines seized an oil tanker suspected of breaching European Union sanctions against Syria.

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