Brent stanches slide, WTI slides as oversupply fears hang over market
U.S. crude oil fell on Friday, on track for its fourth daily decline on continued concerns about ample supply at a time of weak global economic data and fragile demand.
Analysts and traders also cited some liquidation of long positions ahead of Monday's expiration of the front-month light-crude contract.
Brent crude hovered near $98 a barrel, up about 70 cents a barrel. U.S. crude ended down 66 cents at $92.41 a barrel. Both contracts saw their biggest drop in more than two weeks on Thursday.
Renewed strength in the U.S. dollar against major currencies pressured oil. The dollar index was on track for its tenth straight week of gains. The Euro also reached a 14-month low vs the U.S. dollar. The stronger dollar has put a drag on oil markets as it makes commodities denominated in the U.S. currency more expensive for holders of other currencies.
"What we're seeing is a situation where everybody is concerned about the demand side of the equation and oversupply. Let's face it, the market is very heavy right now," said Phil Flynn, an analyst at Price Futures Group in Chicago. "The concerns previously about war and political risk have faded. (Also) with the Fed talking about raising interest rates, you're creating this huge upwards momentum in the dollar."
On Monday, Brent hit its lowest point since July 2012 as oil supply overwhelmed lackluster demand in Europe and Asia, with a glut of high-quality, light oil pushing North Sea crude for immediate delivery to big discounts below futures.
After the price slide, OPEC's secretary-general said he expected the cartel, which pumps around a third of the world's oil, to reduce production next year.