Crude oil prices printed their third weekly loss in four at the end of its most recent trading session.
Oil traders are concerned about the blurred demand outlook in the short term, as an unexpected build in oil production coupled with additional oil supplies Libya, rattled the nerves of oil traders.
What we know; West Texas Intermediate futures, the key gauge used to determine U.S. oil prices, settled at $40.04 per barrel. For the week, West Texas Intermediate lost 2.1%.
Brent crude, the world’s benchmark for crude oil prices, settled at $41.92 for the week, Brent lost 3%.
The most recent OPEC+ meeting failed to reassure traders about oil-producing members, complying with production cuts till the end of 2020.
Also reports from Libya in the past week revealed it expected to raise production by around 260,000 barrels per day, by next week, up from some 100,000.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics spoke on supply-side fundamentals of crude oil by saying,
“Again, it been another week where traders have been inundated with dreary demand news, but it was supply-side fundamentals that supported crude oil again this week.
“Prices have been backed with the Department of Energy (DOE) inventory stats showing a crude draw and the same a significant drop in gasoline stocks.
“Supply is far less of a problem to the view than demand. Robust compliance from OPEC+ on cuts and limited upside for US production should keep supply below demand in for the foreseeable future and help global inventories move in the right direction.”