Oil prices fell Friday morning on renewed concerns about oversupply.
Continue Reading Below
Light, sweet crude for September delivery recently lost 72 cents, or 1.5%, to $46.19 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, lost 71 cents, or 1.4%, to $48.59 a barrel on ICE Futures Europe.
Further confirmation of rising supply from the Organization of the Petroleum Exporting Countries helped sink oil from earlier gains in overnight trading, brokers said. Tanker tracking firm Petro-Logistics said OPEC supply is on track to exceed 33 million barrels a day in July, which would be the highest since December 2016, according to newswire reports. The Swiss company couldn't immediately confirm the reports.
The data isn't far from what has already been reported. The International Energy Agency said last week that OPEC crude output was rising to its highest level in 2017 at 32.6 million barrels a day, driven by Libya, Nigeria and Saudi Arabia.
But any prospect for more OPEC supply increases can shake a market in which a rally was already looking fragile, brokers and analysts said. A recent rally, which includes U.S. oil's longest winning streak in seven years, has stalled in recent days as it bumped up against six-week highs, a signal to some momentum-based traders that oil's next move is a retreat.
OPEC has tried to right the market with a pact to cut output this year, but it hasn't pushed futures prices to the $60 mark that many expected. Now traders are becoming leery again of rising production from several sources globally, including countries that were supposed to be part of OPEC's output cuts.
Continue Reading Below
"The silent fear now is that the OPEC deal could really start to unravel, " said Bill Baruch, chief market strategist at Chicago brokerage iiTrader.
OPEC officials are about to start meetings in Russia this weekend with counterparts from non-OPEC countries that have participated in this year's output cuts. Delegates are supposed to discuss the possibility of including two previously exempted OPEC members, Nigeria and Libya, into the deal. But traders are becoming skeptical that meetings will produce any significant changes.
"We're getting back to this idea that the market may not rebalance as thought," said Bart Melek, head of commodity strategy at TD Securities in Toronto. "What's triggering it is the lack of signaling from Saudi Arabia, OPEC and Russia that they may do more."
Gasoline futures recently lost 2.1%, to $1.573 a gallon, and diesel futures lost 1.7%, to $1.5172 a gallon.
Write to Timothy Puko at email@example.com
(END) Dow Jones Newswires
July 21, 2017 10:41 ET (14:41 GMT)