Investing.com – Although oil prices bounced higher in overnight trade as OPEC said it would make deeper-than-expected quotas of its output cuts public, optimism faded in early morning trade on Friday as crude headed for the largest weekly decline in a month as concerns over weak economic growth and rising U.S. shale production outweighed hopes that the cartel could keep the global supply glut in check.
New York-traded fell 18 cents, or 0.39%, at $45.70 a barrel by 5:05 AM ET (10:05 GMT), on track for a weekly decline of 10%.
Meanwhile, , the benchmark for oil prices outside the U.S., traded down 44 cents, or 0.81%, to $53.91, also down 10% on the week.
Prices had briefly moved higher overnight as OPEC Secretary General Mohammad Barkindo said in a letter seen by Reuters that member states should reduce output to 3.02%, which is higher than the originally agreed figure of 2.5%, according to a letter seen.
Barkindo also reportedly said that member countries would make their quotas public and applauded Saudi Arabis for pledging to reduce output in 10.2 million barrels per day, more than allocated.
The cartel is expected to publish the full list of supply cuts by the end of next week.
“The current oil prices will force OPEC to increase compliance with the production cut deals, supporting Brent prices. The temporary recovery in prices has been driven by short-sellers buying back,” Wang Xiao, head of crude research at Guotai Junan futures said.
But buying interest faded in early morning trade, falling further from their peak in October as concerns over oil demand increased because of a slowing global economy and signs of oversupply.
Stephen Innes, head of trading for Asia-Pacific at OANDA said in a note that market volatility was “getting exaggerated by immensely thin liquidity conditions, risk sentiment, and holiday market participation”.
Worries of a global supply glut will remain in the spotlight on Friday as investors keep an eye on a measure of future U.S. output with Baker Hughes’ out at 1:00 PM (18:00 GMT).
Bulls hold hopes that the number of active domestic rigs drilling for oil will register its third straight decline, after falling last week by four to 873, the lowest since mid-October.
In other energy trading, slumped 1.12% to $1.3171 a gallon by 5:12 AM ET (10:12 GMT), while dropped 0.58% to $1.7395 a gallon.
Lastly, traded up 1.67% to $3.643 per million British thermal units, supported by data that showed a larger-than-expected decline in stockpiles last week.
— Reuters contributed to this report.
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Source: Investing.com
