LONDON: Brent crude slipped further below $107 a barrel yesterday on concern about higher supply and faltering demand, despite signs of faster economic growth in the world’s second-largest consumer China.
Worries that the escalating war in Syria could disrupt Middle East oil supplies pushed Brent to a six-month high above $117 in August. But prices have dropped more than $10 a barrel since then and some analysts see further falls ahead.
US crude oil has been depressed by a seasonal dip in demand and increasing domestic oil production that has boosted stockpiles, particularly on the US Gulf coast.
Brent crude for December was down 20 cents a barrel to $106.79 by 1337 GMT, falling for a third day.
US crude oil was up 16 cents at $97.27, although still down around 3.5 percent on the week, its biggest weekly loss since June.
“We are seeing some consolidation after several days of falls,” said Commerzbank senior oil and commodities analyst Carsten Fritsch in Frankfurt.
“But the fact that prices have not bounced back is quite bearish. The risks are still to the downside.”
Oil supplies have risen in recent weeks with higher output from several producers in the Middle East and North Africa and several analysts see oil heading lower.
“Balances are not as tight as we, or the market, had expected,” said Virendra Chauhan, oil analyst at London-based consultancy Energy Aspects.
“The worst of this year’s supply shortfalls is now behind us, with maintenance at non-Opec fields largely complete and some of the lost Opec production also coming back in Libya, Nigeria and Iraq,” Chauhan added.