Oil Prices Lower On Oversupply Concerns

Oil prices were under pressure on Friday after U.S. crude entered a bear market in the previous trading session.

U.S. prices are off more than 20% since their highs in June, meeting a common definition of a bear market. Oil rallied earlier this year on expectations that cuts in drilling activity and investment will rebalance the market, but fell back in recent weeks as the global oversupply of crude showed little signs of receding.

“We continue to have concerns that the oil market could be oversupplied for longer than we previously anticipated,” said Jason Gammel, oil analyst at Jefferies.

Brent crude LCOU5, -0.45% the global oil benchmark, fell 0.2% to $55.17 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU5, +0.04%  traded up 0.5% at $48.70 a barrel.

Earlier on Friday, Chinese manufacturing data disappointed markets.

The Caixin China Manufacturing Purchasing Managers’ Index’s initial reading stood at 48.2 in July, compared with a final reading of 49.4 in June, Caixin Media Co. and research firm Markit said. The reading is at a 15-month low and was significantly below market expectations.

via MarketWatch

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza