London — Oil prices edged lower on Friday and were on track for weekly losses, weighed down by rising Opec exports and strong output from the US.
Brent crude futures, the international benchmark, were trading at $51.61 a barrel at 9.58am GMT, 40c below the last close and heading for a fall of more than 1.5% on the week.
US West Texas Intermediate (WTI) crude futures were 40c lower at $48.63 a barrel and were set to drop by just more than 2% for the week.
Analysts said prices were pressured by rising output, although strong demand limited the losses.
"Increasing Opec production and increasing Opec exports are the reason the market has been trading lower," said PVM Oil Associates analyst Tamas Varga.
While the oil cartel is leading cuts of 1.8-million barrels a day along with some nonmembers such as Russia, its July exports rose to a record high, according to a report by Thomson Reuters Oil Research.
July’s exports of 26.11-million barrels a day was a rise of 370,000 barrels a day, with most coming from Nigeria.
A Reuters survey also showed Opec oil output at 2017 highs in July, led by Libyan gains. Both Libya and Nigeria were exempt from Opec’s output cut deal.
Output in Russia is also high. Russia’s largest oil producer Rosneft said its crude oil output grew 11.1% year on year in the second quarter.
In the US, oil production has hit 9.43-million barrels a day, the highest since August 2015 and up 12% from its most recent low in June 2016.
Barclays bank said: "We expect a downward [price] correction during this quarter," but forecasts Brent at an average of $54 a barrel during the fourth quarter.
Still, prices were still more than 16% above the lows hit in June, as strong summer demand for transport fuel has buoyed benchmark contracts.
US petrol demand rose to a record 9.842-million barrels a day last week, according to government data this week.
"[Petrol] demand is now +0.1% [year on year]. This is reasonably encouraging given it had been flat or negative since late November 2016," US investment bank Jefferies said.
It said US petrol inventories "fell for the seventh consecutive week … and are now only 6.3-million barrels above the five-year average".
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.