Oil markets have stabilised but remained weak as prices continue to experience pressure from rising supply and worries of a global economic slowdown.
US West Texas Intermediate (WTI) crude oil futures fell six cents to trade at $65.61 a barrel, while front-month Brent futures LCOc1 increased by nine cents to reach $70.74, Reuters reported.
Both futures are set to post losses for the fifth consecutive week, with WTI down 4% so far this week and Brent expected to register a drop of almost 3% for the week. Since early last month, the crude futures have fallen by nearly 20%.
Rivkin Securities investment analyst William O’Loughlin was quoted by the news agency as saying: “Oil prices are now officially in a bear market, having declined 20% from their (October) peak.”
Analysts opined that rising supply, despite US sanctions on Iranian crude exports, and economic slowdown concerns stand out as the major factors impacting oil prices.
Bernstein Energy analysts said: “As OPEC exports continue to rise, inventories continue to build, which is putting downward pressure on oil prices.
“A slowdown in the global economy remains the key downside risk to oil.”
Meanwhile, China’s top auto industry association stated that the country’s automobile sales for last month declined 11.7% in comparison to the period a year ago.
The decrease in sales continues the declining trend observed in the Chinese auto market during the preceding three months.
Oil prices reached four-year highs in the first week of last month ahead of the re-introduction of sanctions against Iran.
However, some of the nations continue to purchase oil from Tehran after the US granted waivers.
The countries, including India, China, Japan, and South Korea, can import crude from the Middle Eastern nation for at least another 180 days.
The exemptions eased concerns that the sanctions would take out significant amount of oil from the market.