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SINGAPORE (Reuters) – Oil prices tumbled on Friday, amid fears that oil producers are producing more oil than the world needs, despite dire economic prospects.
PHOTO: A pump jack on a lease owned by Parsley Energy operates at sunset in the Permian Basin near Midland, Texas on August 23, 2018. REUTERS / Nick Oxford / File Photo
The futures contracts for WTI (West Texas Intermediate) CLc1 US crude were $ 53.83 per barrel at 0029 GMT, 80 cents or 1.5% below their latest settlement.
Brent crude oil futures in the first month, LCOc1, have not been traded yet.
"Oil prices have come down because concerns about additional oversupply have lowered sentiment," ANZ Bank said Friday.
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.
High output occurs as demand prospects weaken as a result of a global economic downturn.
As a result, oil prices have fallen about 30% since their last peak in early October.
Saudi Arabia, the leading exporter of crude oil, adjusted to lower demand and announced Thursday a reduction in its supply.
"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.
Report by Henning Gloystein; edited by Richard Pullin
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