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Oil Prices Decline, Paring Weekly Gains Ahead of U.S. Production Data

Published 2018-09-14, 11:00 a/m
© Reuters.  Oil drops for second day as traders await U.S. shale production data.
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Investing.com - Oil prices declined for a second-consecutive session on Friday as increasing global supplies spooked bulls and investors looked ahead to weekly data on U.S. production.

New York-traded West Texas Intermediate crude futures fell 23 cents, or 0.34%, at $68.36 a barrel by 10:56 AM ET (14:56 GMT).

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., lost 51 cents, or 0.35%, to $77.91.

The two-day selloff began as the International Energy Agency said Thursday that global crude supplies hit a record high in August.

The agency also warned that oil-demand growth could come under pressure as a stronger greenback could raise the cost of importing energy, while an "escalation of trade disputes" would likely be another headwind to demand growth.

Despite the two-day decline, crude prices are set for a weekly gain of around 1%.

Later on Friday, traders will pay close attention to latest data on U.S. crude production from Baker Hughes.

The U.S. rig count, an early indicator of future output, fell by 2 to 860 last week.

Meanwhile, as part of America's continual effort to bring down oil prices in the face of November’s sanctions on Iran’s exports, the country’s energy secretary, Rick Perry, met with his Russian counterpart Alexander Novak in Moscow on Thursday, urging Novak to cooperate as leading energy producers to ensure global market stability. He told Novak that both countries are eager to keep the market competitive. He had met with Saudi Arabia officials earlier in the week. The three countries are the biggest producers of oil in the world.

After the Moscow meeting, Perry told journalists, “The [Saudi Arabia] kingdom, the members of OPEC that are opting their production to be able to make sure that the citizenry of the world does not see a spike in oil price … are to be admired and appreciated, and Russia is one of them.”

He added that the U.S., Russia and Saudi Arabia are working together to ensure accessibility to affordable energy.

Meanwhile, the Joint Technical Committee -- composed of representatives from the OPEC and non-OPEC major producers led by Russia -- is expected to meet on Sept. 17 to consider proposals on distributing the agreed output increase of 1 million barrels per day.

OPEC, Russia and other non-members agreed in June to return to 100% compliance with oil output cuts that began in January 2017, after underproduction by some had pushed compliance above 160%.

According to the sources cited, there are four proposals on the table that will be discussed before being presented to ministers attending the next monitoring meeting on Sept. 23 in Algeria.

In other energy trading, gasoline futures fell 1.69% to $1.9647 a gallon by 10:58 AM ET (14:58 GMT), while heating oil lost 1.02% to $2.2008 a gallon.

Lastly, natural gas futures traded down 1.74% to $2.768 per million British thermal units.

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