REUTERS
Oil prices continue their downward trend on Friday with the U.S. benchmark on track for its eighth weekly decline, amid growing worries over an oil supply glut following an unexpectedly large rise in U.S. stockpiles and China's economic slowdown, according to a weekly British news magazine The Week.
Oil prices continue their downward trend on Friday with the U.S. benchmark on track for its eighth weekly decline, amid growing worries over an oil supply glut following an unexpectedly large rise in U.S. stockpiles and China's economic slowdown, according to a weekly British news magazine The Week.
Brent crude for October deliveries fell by 0.94% to $46.18 a barrel on Friday morning, while U.S. benchmark West Texas Intermediate crude plunged by 1.02% to $40.90 a barrel.
The decline in oil prices has been driven by an oversupplied global oil market, with major OPEC countries maintaining high production volumes.
Analysts at Citi told it is now a "conceivable reality" that U.S. oil would return to a previous low of $32 hit at the height of the 2008 financial crisis, according to the report.
The International Energy Agency revealed on Wednesday that U.S. reserves had increased by 2.6 million barrels to 456.2 million barrels, "upending analysts' beliefs that stocks would decline."
"The extent of excess supply is not something that demand is going to grow into in the near future," said Ric Spooner, a chief analyst at CMC Markets in Sydney, Bloomberg reported.
"If we’re going to avoid downward pressure on prices, it’s going to have to come from production cuts," he said.