Oil prices fell in Asia today on persistent concerns about the global supply glut after the OPEC cartel’s indication that it will not budge from its current lofty output levels, analysts said.
US benchmark West Texas Intermediate for September fell 36 cents to USD 46.76 while Brent crude for September eased 42 cents to USD 51.79 in morning trade.
Prices were facing downward pressure following “signs that top producers in the Middle East were continuing to pump at record levels despite a growing global glut,” said Singapore’s United Overseas Bank in a market commentary.
Oil prices dived on Friday after Abdullah El-Badri, secretary-general of the Organisation of the Petroleum Exporting Countries, said the group would not cut output in response to lower prices.
Speaking in Moscow on Thursday after meeting Russia’s energy minister, he said the cartel is “not ready” to cut production, which is currently at around 30 million barrels per day.
Analysts said the statement shows the 12-nation OPEC, led by kingpin Saudi Arabia, is determined to defend its market share as it fends off competition from US shale oil.
At its most recent meeting in Vienna in June, OPEC kept its output levels of around 30 million barrels a day despite the supply glut that has depressed oil prices.
Crude futures are under pressure also owing to the strength of the US currency, which makes dollar-priced oil more expensive to holders of weaker units, dampening demand.
The dollar has picked up steam on expectations the Federal Reserve will raise US interest rates later this year.
Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY, said the upcoming release of key US and European economic data “will set the tone for crude oil prices” this week.
A slew of German, French and British manufacturing data will be released this week, while the keenly watched US non-farm payrolls data for July will be released on Friday.