Oil edges lower, set for big weekly decline

Oil prices edged lower on Friday and were set for a second weekly fall, as the market shrugged off a warning that spare capacity may be stretched as OPEC and Russia increase production.

Brent crude eased 20 cents, or 0.3 percent, to $74.25 by 0059 GMT.

On Thursday it gained $1.05 a barrel, rebounding from a session low of $72.67.

It is heading for a weekly fall of nearly 4 percent.

U.S. crude dipped 6 cents, or 0.1 percent, to $70.27, after a five cent decline in the previous session. It is heading for a weekly decline of nearly 5 percent.

It has been a wild week for oil prices with both the main benchmarks suffering heavy losses on Wednesday as traders focused on the return of Libyan oil to the market amid concerns about a China-U.S. trade war.

However, a warning on spare capacity by the International Energy Agency (IEA) pushed Brent higher on Thursday, helping it recoup some losses.

The IEA cautioned that the world’s oil supply cushion « might be stretched to the limit » due to production losses in several different countries.

« Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit, » the Paris-based IEA said in its monthly report.

« This vulnerability currently underpins oil prices and seems likely to continue doing so, » the agency said.

Source: CNBC

Related posts