Crude prices sag as market focus returns to global glut
On Thursday, crude prices went down as brimming American as well as Asian fuel inventories returned traders’ attention to a large global glut, cutting short a price soar and also limiting Brent crude futures to below the $50 a barrel mark.
International benchmark Brent crude futures traded at $48.95 per barrel during early Asia trade, just down 10 cents, having closed down 1.8% previously. American West Texas Intermediate crude futures were worth $46.68 per barrel, down 9 cents, having fallen 2.8% on Wednesday.
Traders told that price dips this week had pared a rally, which pushed oil up by more than 20% earlier in August on talk of a potential deal by crude producers to freeze their output in an effort to cope with oversupply.
Hopes of a deal got dampened by record crude production from the Organization of the Petroleum Exporting Countries as well as little prospect of voluntary limitations.
Brent also found itself under pressure after Iraq, an OPEC-member told it still isn't producing as much crude as it should be, thus raising worries that OPEC supply will keep increasing.