Oil prices dip on swelling U.S. supply; OPEC output cuts loom

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices slipped on Friday after the United States reported a 10th straight weekly gain in commercial crude reserves amid record output.

U.S. West Texas Intermediate (WTI) crude futures () were at $51.30 per barrel at 0023 GMT, down 15 cents, or 0.3 percent from their last settlement.

International Brent crude oil futures () had yet to trade.

U.S. commercial crude oil inventories rose by 3.6 million barrels in the week to Nov. 23 to 450.49 million barrels, the Energy Information Administration (EIA) said this week. Production remained at a record 11.7 million barrels per day (bpd).

Crude reserves increased 6.4 billion barrels, or 19.5 percent, to 39.2 billion barrels at year-end 2017, marginally higher than the previous record of 39 billion barrels set in 1970, the EIA said.

The surge in U.S. supply is part of an emerging oil glut following production increases also in Russia and by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC), including from its two biggest producers, Saudi Arabia and Iraq.

The supply overhang has triggered a price slump of more than 30 percent in crude since early October.

To rein in the glut, ANZ bank said on Friday that OPEC and its main partner Russia were “moving closer to an agreement around further production cuts”.

OPEC and Russia will gather on Dec. 6 and 7 in Vienna to discuss output policy.

Before that, the world’s top three producers – the United States, Russia and Saudi Arabia – will be part of a meeting of the Group of 20 industrialized nations in Buenos Aires, Argentina, this weekend.

“With fears over excessive supply and worries about falling demand the primary themes weighing on oil markets, the outlook for Brent Crude and WTI remains bearish,” said Lukman Otunuga, analyst at futures brokerage FXTM.

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