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 The fall mirrored a general sell-off in commodities on persistent
worries about demand in China, the world's biggest user of energy
and many key materials such as copper.
China's state planner said on Friday a slowing economy must not be
allowed to morph into social risks as the volatile Chinese stock
market fell again.
"All commodities are down," said Abhishek Deshpande, oil analyst at
Natixis. "Commodities face weak demand, excess supplies and weakness
in China. More weakness is ahead of us."
Benchmark North Sea Brent crude <LCOc1> headed for its fifth
consecutive weekly fall after comments on Thursday in Moscow by
Abdullah al-Badri, secretary-general of the Organization of the
Petroleum Exporting Countries.
Badri said rising demand would prevent a further fall in oil prices
and suggested cuts in OPEC output would have little impact on the
market.
Brent <LCOc1> was down 50 cents at $52.81 a barrel by 1140 GMT (0740
EDT) after settling 7 cents lower in the previous session. U.S.
light crude <CLc1> was down 80 cents at $47.72 a barrel.
OPEC members produced around 31.25 million barrels per day (bpd) in
the second quarter, about 3 million bpd more than daily demand, a
Reuters survey showed this week.
The surplus oil has filled stockpiles around the world, driving
prices down sharply. Both major crude oil benchmarks are down more
than 50 percent from a year ago.
Data from the U.S. Energy Information Administration (EIA) this week
showed U.S. oil stocks hit all-time highs for a third successive
week at 1.969 billion barrels. Overall, U.S. stocks are up 145
million barrels from a year ago.
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Commerzbank's head of commodities research in Frankfurt, Eugen
Weinberg, said OPEC must eventually cut back on production to avoid
much lower oil prices.
"We are also hopeful that OPEC will agree on a stricter quota
discipline at its December meeting," Weinberg said.
Chart analysts say oil futures still look very weak.
Tamas Varga, analyst at London brokerage PVM Oil Associates, said a
brief pause in the downtrend appeared to be over.
"Today hopefully will (tell us) if the relatively stable performance
of the last two days is a correction, or the market actually is
about to bottom out. From the technical perspective it is probably
the former," Varga said.
(Additinal reporting by Keith Wallis in Singapore; Editing by Dale
Hudson and Jason Neely)
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