Oil futures dipped further in early Asian trade on Friday, finding resistance at the $50 a barrel mark as investors worried higher prices could reactivate shuttered crude output, adding to global oversupply.
Oil pushed through $50 for the first time in around seven months on Thursday as supply disruptions from Canadian wildfires and attacks in Libya and West Africa have helped cut daily output by 4 million barrels. Increased demand and a weaker dollar helped support prices.
U.S. crude fell 7 cents to $49.41 a barrel as of 0033 GMT after settling down 8 cents in the previous session. It touched $50.21 earlier on Thursday, its highest since early October.
Brent fell 9 cents to $49.50. Brent closed down 15 cents, retreating from $50.51, its highest since early November.
“WTI and Brent futures went through $50 a barrel on tightening supply, but unsurprisingly hit stubborn resistance at that key level and then eased back,” ANZ said in a note on Friday.
Oil prices, which have risen nearly 90 percent from 12-year lows hit earlier this year, face pricing barriers to moving higher in the next three to five weeks, technical analysts said on Thursday, with Brent facing a significant hurdle at around $52 a barrel.
Donald Trump, the presumptive Republican presidential nominee, promised to revive the ailing U.S. oil and coal industries on Thursday, by scrapping key environmental policies including a U.S. withdrawal from the U.N. global climate accord.
Nigeria’s government needs to address grievances in the oil-producing Niger Delta, Oil Minister Emmanuel Ibe Kachikwu said on Thursday, hours after a Chevron source said a militant attack had forced it to shut its onshore operations in the restive region.
Investors were also awaiting the appearence of U.S. Federal Reserve Chair Janet Yellen at an event later on Friday for further indications on when the Fed could raise interest rates.
A raft of Fed officials have called for a normalisation of interest rates as the U.S. economy and inflation rise, with odds of a June hike now sitting around 34 percent, compared with 4 percent last week, ANZ analysts said.
“Markets have moved a lot recently and whilst activity data has improved and interest rate expectations have risen, more news is now needed to help shape the markets’ expectations over a possible June/July Fed rate hike,” the ANZ note on Friday said.