London – Oil edged further below 57 dollars a barrel on Friday, pressured by evidence of ample supplies, including the biggest jump in U.S. inventories since 2001 and Saudi Arabian output reaching a record high.
Brent crude LCOc1 slipped 13 cents to close at $56.44 a barrel while U.S. crude CLc1 was down 43 cents at $50.36.
“Most of the fundamental factors are still pointing to lower prices,” said Eugen Weinberg, analyst at Commerzbank.
“At the moment, we have an oversupply of more than 1 million barrels per day.”
The price of Brent has halved from $115 a barrel in June last year, a drop that deepened after OPEC refused to cut output, choosing to defend market share instead.[pro_ad_display_adzone id=”10″]
Top exporter Saudi Arabia was the driving force behind the policy shift.
While some OPEC members are urging output cuts to boost prices, Saudi Arabia has shown no sign of a rethink.
Oil Minister Ali al-Naimi told reporters on Tuesday that Riyadh has boosted its crude production to 10.3 million bpd, the highest rate on record.
Further pressuring prices, a U.S. government report on Wednesday said domestic crude stocks surged nearly 11 million barrels last week, the biggest gain in 14 years.
A glut of unsold Nigerian crude is building up too, traders say.
This is particularly bearish for Brent, because Nigerian crude is priced against it. (Reuters/NAN)
