Oil prices extended losses on Friday amid concerns over possible oversupply after the US said it could take several years to refill the country’s Strategic Petroleum Reserve (SPR).
Brent crude fell 24 cents, or 0.32%, at 0412 GMT to $75.67 a barrel, while West Texas Intermediate crude futures slipped 24 cents, 0.34%, to $69.72 a barrel.
Both indicators, down about 1% on Thursday, are still on the way to a weekly gain of about 3%-4%. It recovered from the most significant weekly declines of recent months, which took place last week due to the banking sector crisis and a possible recession.
The White House had said it would repurchase oil for SPR in October when prices drop to about $67-72 per barrel or below. Although WTI prices are at $67-72 per barrel, the sales emerge up after the US postponed replenishing its oil reserves.
The continued supply of crude oil from Russia to the global market is also said to be putting pressure on oil, which, along with ongoing concerns over the banking sector, could push benchmarks to test the lows earlier this week.
Russian Deputy Prime Minister Alexander Novak said that the previously announced 500,000 barrels per day cut in Russia’s oil production will come from the 10.2 million barrels per day production level in February.
According to Novak, this means that Russia aims to produce 9.7 million barrels per day between March and June when the production cut will take effect.
However, the decline in the oil price was suppressed by expectations of strong demand from China. According to some analysts, demand for commodities has increased in China, the world’s largest oil importer, with oil demand exceeding 16 million barrels per day.
The more than 1% drop in the dollar last week made dollar-denominated commodities cheaper for holders of other currencies, limiting downward price pressures.
