The price of oil is headed for the longest run of weekly declines since January amid signs the global glut that’s driven prices to the lowest in six years will be prolonged.
Futures dropped 0.3% in New York on Friday, bringing the decline since Aug. 7 to 4 percent for a seventh weekly loss. The market surplus will last through 2016, the International Energy Agency said on Wednesday, while the Organisation of Petroleum Exporting Countries reported that output had increased last month to the highest level in more than three years. A measure of price fluctuations is poised for a second weekly advance amid mixed demand signals from China.
Brent for September settlement, which expires Friday, was 1 cent lower at $49.21 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.08 to WTI. The more-active October contract was 10 cents lower at $49.53 a barrel.
Oil has slumped more than 30 percent from its June closing peak as leading members of the Organization of Petroleum Exporting Countries maintain output. China’s record imports in July boosted speculation that sustained buying may alleviate a glut, while further devaluation of its currency raised concern that its economy is slowing.
OPEC raised output by 100,700 barrels a day to 31.5 million in July amid a recovery in Iranian supply, the group said in its monthly market report this week, citing external sources. Saudi Arabia, the group’s biggest member, told OPEC it cut production by the most in almost a year.
Crude stockpiles in the U.S., the world’s biggest oil consumer, remain about 90 million barrels above their five-year seasonal average even as production eased and supplies fell last week, according to data from the Energy Information Administration