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Oil Lower After Strong US Retail Sales and Oversupply Concerns

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Oil slipped below $52 a barrel on Friday, giving up an earlier gain, as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC’s plans to cut output.

Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC’s Sept. 28 deal to reduce oil production, before weakening on rising U.S. crude stocks and as the Organization of the Petroleum Exporting Countries’ own numbers showed output is still rising. [OPEC/M]

Global benchmark Brent LCOc1 was down 4 cents at $51.99 at 1328 GMT (0928 EDT), having traded as high as $52.55 earlier. U.S. crude CLc1 gained 20 cents to $50.64.

“The fundamental backdrop is still bearish,” said Commerzbank analyst Carsten Fritsch. “Every increase is driven by speculation and optimism”, rather than an actual tightening of supplies, he said.

U.S. crude inventories overall USOILC=ECI rose by 4.9 million barrels, the first increase in six weeks, the government’s Energy Information Administration reported on Thursday.

via Reuters

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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

@alfonso_forex

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