Oil falls as traders take profits

Singapore — Oil prices fell on Friday as investors cashed in gains of more than 2% made during the previous session on the concern demand may slump amid slowing economic growth, although there are still expectations for producer supply cuts to support prices.

China, the world’s second-largest economy and the largest crude importer, on Friday reported some of the slowest retail sales and industrial output growth in years for November, highlighting the risks of the country’s trade dispute with the US.

Oil refinery throughput in November in China fell from October, which was the second-highest month on record, suggesting an easing in Chinese oil demand, though runs were 2.9% higher than a year earlier.

However, some support for prices remains because of the output cuts agreed between oil cartel Opec and non-Opec producers including Russia. That could create a supply deficit by the second quarter of 2019, the International Energy Agency (IEA) said on Thursday.

Brent crude oil futures were at $61.09 a barrel at 3.53am GMT, down 36c, or 0.6%, from their last close.

US West Texas Intermediate (WTI) crude futures were at $52.47 a barrel, down 11c, or 0.2%, from their last settlement.

“I think after the big moves overnight there’s a little bit of self-shock among traders, volumes are well down.… I don’t see a great deal of follow through on last night’s moves,” said Michael McCarthy, chief markets strategist at CMC markets.

International benchmark Brent crude rose 2.2% on Thursday, while WTI climbed 2.8%.

“After the big move yesterday, it’s a little bit of consolidation that’s happening,” said Jonathan Barratt, chief investment officer at Probis Securities in Sydney.

Source: businesslive.co.za