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Oil prices stabilise, but set for big weekly loss amid trade gloom, rising output

Oil prices stabilise, but set for big weekly loss amid trade gloom, rising output
FILE PHOTO: Crude oil is dispensed into a bottle in this illustration photo June 1, 2017. REUTERS/Thomas White/File Photo -
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Thomas White(Reuters)
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TOKYO (Reuters) – Oil prices steadied on Friday after a rough week, squeezed about 4% lower by a combination of rising global supply and uncertain future demand.

U.S. crude <Clc1> surfaced for air for the first time in four days, gaining 15 cents, or 0.3%, to $54.33 a barrel by 0103 GMT. The contract was heading for a weekly loss of more than 4%.

Brent crude <LCOc1> was up 6 cents, or 0.1%, at $59.68 a barrel, leaving it also on track for drop of nearly 4%.

Worries over global economic growth, along with oil demand, continued to haunt the market as leaders from the United States and China continue to struggle to end a 16-month dispute that has roiled trade between the world’s top two economies.

“Concerns about the U.S.-China trade dispute have come home to roost,” said Stephen Innes, Asia Pacific market strategist at AxiTrader. “Framing this doom and gloom view is the massive U.S. inventory build and the horrendous economic data released over the past 24 hours.”

U.S. crude inventories <USOILC=ECI> rose by 5.7 million barrels in the week to Oct. 25, dwarfing analyst expectations for an increase of just 494,000 barrels.

Meanwhile, Japanese factory activity sank to more than a three-year low in October, data showed on Friday, in a fresh warning sign for the world’s third-largest economy.

And on Thursday, official data from China showed factory activity shrank for a sixth straight month last month, while growth in the country’s service sector was its slowest since February 2016.

A Reuters survey showed that oil prices are likely to remain pressured this year and next. The poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 next year.

Meanwhile, U.S. crude production soared nearly 600,000 barrels per day in August to a record of 12.4 million, buoyed by a 30% increase in Gulf of Mexico output, according to government data released on Thursday.

Those numbers came as a Reuters survey found output from Organization of the Petroleum Exporting Countries (OPEC) recovered in October from an eight-year low, with a rapid recovery in Saudi Arabian production from attacks on oil plants more than offsetting losses in Ecuador and voluntary curbs under a supply pact.

(Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell)

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