Weak oil markets, the global supply outpacing the demand

SINGAPORE (Reuters) – Oil markets remained weak on Friday under pressure from concerns that producers are producing more oil than necessary in a sluggish economic climate.

Futures contracts for WTI (West Texas Intermediate) CLc1 crude futures were $ 54.07 per barrel at 0204 GMT, down 56 cents from their latest settlement.

Brent crude futures at the beginning of the month, LCOc1, were $ 62.64 per barrel, 4 cents higher than their last closing price in a context of weak trading due to vacation in the United States. Japan.

"Oil prices have come down because concerns about additional oversupply have lowered sentiment," ANZ Bank said Friday.

Brent could return to 61.71 dollars a barrel at its lowest level of 20 November, in the short term, said Reuters technical analyst Wang Tao.

The supply of oil has risen sharply this year, with the top three producers of the United States, Russia and Saudi Arabia pumping over one-third of world consumption, which is close to 100 million barrels per day.

(Graph: Production of Russian, American and Saudi crude oil – tmsnrt.rs/2CTwqaq)

High output occurs as demand prospects weaken as a result of a global economic downturn.

Oil prices have fallen by about 30% since their last highs in early October, as global production began to exceed consumption in the fourth quarter of this year, ending a period of under-supply that began in the first quarter. of 2017, according to Refinitiv data. Eikon.

Saudi Arabia, the leading exporter of crude oil, said it could reduce supply by adapting to declining demand.

"We will not sell oil that our customers do not need," said Saudi Energy Minister Khalid al-Falih.

Saudi Arabia is de facto the leader of the oil producer cartel (OPEC), which plans to cut oil supply by up to 1.4 million barrels a day to avoid an overabundance of supply.

(Chart: World balance of supply and demand of crude oil – tmsnrt.rs/2PKtzIy)