Global oil prices decline on oversupply concerns

| Updated: October 22, 2017 02:37:26

Oil prices decline for second day

Oil prices fell on Tuesday, declining for a second day and sapping more strength from a third-quarter rally, amid signs that a global glut in crude may not be clearing as quickly as some had hoped.

US crude CLc1 was down 14 cents, or 0.3 per cent, at $50.44 a barrel by 0149 GMT, after closing the previous session down $1.09, or 2.1 per cent, reports Reuters.

The US benchmark posted a third quarter gain of around 12 per cent, its strongest quarterly climb since the second quarter of 2016, but has now dropped nearly 5.0 per cent from a six-month high reached on Thursday.

Brent crude LCOc1, the global benchmark, was down 19 cents, or 0.3 per cent, at $55.93 a barrel. The contract fell 67 cents, or 1.2 per cent, in the last session.

Brent had notched up a third-quarter gain of about 20 per cent, the biggest increase for that quarter since 2004 and traded as high as $59.49 last week. It is down about 6.0 per cent from that level.

Iraq said on Monday that exports rose slightly in September from its southern oilfields, while an earlier Reuters survey indicated that the OPEC overall boosted output.

Oil prices climbed last week on tension in Iraqi Kurdistan after the region’s independence vote, with Turkey threatening to close a pipeline that brings oil from the region in northern Iraq to the Mediterranean.

Turkey has not carried out the threat, analysts said.

The recent rally had also been driven by signs that a three-year crude glut is easing, helped by a production cut deal among global producers led by OPEC.

However, Middle Eastern oil producers are concerned the price rise will stir U.S. shale producers into more drilling and push prices lower again. Key OPEC producers consider a price above $60 as encouraging too much shale output.

One bullish sign was a letter from Libya’s National Oil Company on Monday that declared force majeure on deliveries from Sharara, the country’s largest oilfield. ​

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