|
Brent crude oil dropped $1.22 to a low of $62.65 a barrel,
before recovering to trade around $62.77, down $1.10, by 6.25
a.m. EDT. U.S. light crude oil, also known as West Texas
Intermediate (WTI), fell to a low of $59.08, down 88 cents.
Warplanes from a Saudi-led coalition bombarded Yemen's capital
Sanaa overnight, a Reuters witness said, as warring factions
prepared for talks due to start in Geneva on Monday.
Investors are increasingly concerned about surplus supply in the
global oil market with the Organization of the Petroleum
Exporting Countries pumping around 2 million barrels per day
(bpd) more than needed, according to most industry estimates.
Production has been increasing in top OPEC exporters Saudi
Arabia and Iraq, and a deal with Iran over its nuclear program
may soon lift sanctions on the Islamic Republic, allowing it to
increase oil exports.
Output is also increasing in Libya, where production has been
constrained by civil war.
"Sentiment this morning gets a bearish touch from negative
equities, a dollar to the strong side, Greek concerns and news
of some increase in Libya oil production," said Bjarne
Schieldrop, chief commodities analyst at SEB Markets in Oslo.
Schieldrop said world oil demand was increasing, but that might
not be enough to soak up a global oil supply glut.
"It (oil demand) is probably not strong enough to cover this
gap. The market thus continues to run a surplus," he said.
Brent has fallen from a high above $66 last week and appears to
be settling into a range between $60 and $65, said Carsten
Fritsch, senior oil and commodities analyst at Commerzbank in
Frankfurt.
"There’s a good possibility that we will test the lower end of
this range this week," Fritsch said.
"The market is oversupplied and output continues to rise slowly,
so oil prices should stay under pressure."
(Additional report by Hennning Gloystein in Singapore; Editing
by Dale Hudson and William Hardy)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
