Oil prices fell in early
trading on Friday, as the market refocused on a persistent fuel supply overhang
that is not expected to abate unless OPEC and other producers make a
significant cut to their output.
Reuters
report continues:
International
Brent crude oil futures were trading at US$45.74 per barrel at 0445 GMT, down
10 cents, or 0.2 percent, from their last close.
U.S.
West Texas Intermediate (WTI) crude oil futures were trading at US$44.51 per
barrel, down 15 cents, or 0.3 percent, from their last settlement, with a
stronger dollar also weighing on prices.
Traders
said that an ongoing crude and refined product supply overhang that has dogged
markets for over two years was weighing on markets.
"Crude
oil prices fell as the focus returned to supply growth. The IEA suggested
prices may continue to retreat amid relentless supply growth unless OPEC makes
significant supply cuts," ANZ bank said on Friday.
The
supply overhang could run into a third year in 2017 without an output cut from
the Organization of the Petroleum Exporting Countries (OPEC), while escalating
production from other exporters could lead to relentless supply growth, the
International Energy Agency said on Thursday.
In
its monthly oil market report, the group said global supply rose by 800,000
barrels per day (bpd) in October to 97.8 million bpd, led by record OPEC output
and rising production from non-OPEC members such as Russia, Brazil, Canada and
Kazakhstan.
In
Africa, Nigeria is working out new oil and gas policies to attract more private
investors and boost crude production by 500,000 bpd by 2020, state firm NNPC
said on Thursday.
The
IEA kept its demand growth forecast for 2016 at 1.2 million bpd and expects
consumption to increase at the same pace next year, having gradually slowed
from a five-year peak of 1.8 million bpd in 2015.
Beyond
oversupply, a surging dollar following the initial shock of Donald Trump's U.S.
presidential election win also put pressure on prices, traders said.
Because oil and refined products are traded in dollars, its import costs rise for any country using other currencies at home, potentially crimping demand.
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