Oil prices continued to slide Friday morning, as investors again worried that OPEC was failing to rein in output and make a dent in the continuing global supply glut.
Brent crude, the global benchmark, fell 0.8%, to $51.62 a barrel, in London midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.8%, at $48.66 a barrel.
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Investors were looking ahead to a planned meeting of the Organization of the Petroleum Exporting Countries early next week in Abu Dhabi, where the main topic will be member compliance with a deal to cut production. Preliminary data has shown that OPEC output continued to rise in July.
"I wouldn't expect too much other than the normal platitudes" about all the players needing to show compliance, said Tom Pugh, a commodities economist at Capital Economics, of the coming cartel gathering.
However, Mr. Pugh said investors would be looking for harsher language from Saudi Arabia--the cartel's largest member and the world's biggest exporter--on lax compliance by Iraq and the United Arab Emirates. He said investors would also hope that Libya would join Nigeria in voluntarily capping its output. Both countries were exempt from the original deal.
OPEC's members and 10 producers outside the cartel, including Russia, first agreed last November and December to cap their production at around 1.8 million barrels a day below October 2016 levels. The goal was to drain a global oversupply that has kept prices depressed, but the market has remained subdued, in part because U.S. production continues to rise.
Oil prices had been rallying in recent days but that ended in a selloff late Thursday.
Prices "failed yet again to increase towards and above $53 a barrel, which may encourage some negative reactions" in the market, said Eugen Weinberg, head of commodity research at Commerzbank.
The market is also looking ahead to weekly U.S. oil rig data from Baker Hughes Inc. later Friday.
Earlier this week, the U.S. Energy Information Administration reported that crude stockpiles had dropped by 1.5 million barrels in the week ended July 28, a smaller draw than had been expected. U.S. production, meanwhile, has hit a two-year high.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 0.2% at $1.6282 a gallon. ICE gasoil changed hands at $480.75 a metric ton, down roughly 2.3% from the previous settlement.
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(END) Dow Jones Newswires
August 04, 2017 06:06 ET (10:06 GMT)