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– Oil prices dipped in early trading on Friday following slight gains
in the previous sessions, and analysts said the outlook remained weak
with production high and producers reducing operating costs to adjust to
lower export revenues.
Global oil prices firmed slightly on Thursday but not
before U.S. crude hit a near six-year low and benchmark Brent pared
gains on data showing fresh additions to record-high U.S. oil
inventories.
Benchmark Brent crude oil futures opened Friday’s
trading with losses, opening at $49.15 a barrel at 0100 GMT but falling
to $48.95 by 0200 GMT. U.S. WTI futures were trading at $44.56 a barrel,
almost unchanged.
Analysts said that the market outlook remained weak as
producers were keeping output high and were adjusting to a lower price
environment.
“It looks increasingly difficult to see any voluntary
supply cutbacks in commodity markets,” ANZ bank said on Friday in a
research report.
“Falls in currencies and energy costs will allow many
energy and bulk commodity producers to ride this out this weakness,” it
added.
Despite the weak outlook, oil prices have so far
received support around current levels since the beginning of the year.
With gains above $50 a barrel for Brent also unlikely
in current conditions, that means that price swings have been falling
since the beginning of the year.
Index from front-month Brent crude contracts has fallen from around 65
points at the beginning of the year to just over 53 points currently,
its lowest since 2009.
