Oil prices dip due to oversupply concerns

30 July 2015 (Last Updated July 30th, 2015 18:30)

Oil prices have dropped due to increased concerns of oversupply worldwide following an announcement by the Organization of the Petroleum Exporting Countries (OPEC) hinting at continuing the production rate.

Oil prices have dropped due to increased concerns of oversupply worldwide following an announcement by the Organization of the Petroleum Exporting Countries (OPEC) hinting at continuing the production rate.

Brent fell 70 cents at $52.61 a barrel, while the US light crude dipped 90 cents at $47.62 a barrel, Reuters reported.

OPEC secretary-general Abdullah al-Badri said that surging demand would prevent a further decline in oil prices and suggested cuts in the cartel's output will not affect the market.

"We are hopeful that OPEC will agree on a stricter quota discipline at its December meeting."

During the second quarter, OPEC members produced around 31.25 million barrels per day (bpd), according to a survey conducted by Reuters.

The US Energy Information Administration (EIA) data this week revealed a rise in total US crude stocks at 1.969 billion barrels.

Compared with last year, the crude oil stock rose 145 million barrels, adding to oversupply concerns.

Commerzbank commodities research in Frankfurt head Eugen Weinberg told the news agency said OPEC must eventually cut back on production to avoid much lower oil prices.

Weinberg said: "We are also hopeful that OPEC will agree on a stricter quota discipline at its December meeting."

Investors are keenly waiting for the release of US employment data later on Friday to take positions.