Oil prices crashed further, yesterday and are now heading for a third weekly loss after Saudi Arabia’s Organisation of Petroleum Exporting Countries’ (OPEC), governor said the market could be heading into oversupply, as growth concerns took a hit with a slump in global equities this week.
Following this concern, Brent crude futures were down 45 cents, or 0.6 per cent, at $76.44 a barrel, thus heading for a weekly loss of 4.2 per cent, while then US crude was down 56 cents, or 0.8 per cent, at $66.77 a barrel. The US benchmark is heading for a 3.4 per cent loss this week.
Saudi Arabia’s OPEC governor said on Thursday, that the oil market could face oversupply in the fourth quarter. “The market in the fourth quarter could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks,” Adeeb Al-Aama told Reuters.
Saudi Arabia Energy Minister, Khalid Al-Falih, said there could be a need for intervention to reduce oil stockpiles after increase in recent months.
Falls in stock markets have roiled oil prices this week as Wall Street had its biggest daily decline since 2011.
Financial markets have been hit hard by a range of worries, including the US-China trade war, a rout in emerging market currencies, rising borrowing costs and bond yields, as well as economic concerns in Italy.
US crude oil stockpiles rose last week for the fifth consecutive week, while gasoline and distillate inventories fell, the Energy Information Administration said this week.
Supporting the bearish mood was a report that showed rising inventories at Cushing, Oklahoma, the delivery hub for US crude futures.
Cushing crude stocks rose to 33 million barrels on Tuesday, up almost 1.8 million barrels from the previous week, traders said, citing a report by market intelligence firm Genscape.
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