Crude oil prices rebounded after early weakness and settled modestly higher on Friday, but still posted a third weekly loss amid speculation the market could well be heading into oversupply in the fourth quarter.
Despite the upcoming sanctions on Iranian oil, supply may not be hit as Saudi Arabia has assured that it would strive to increase output and make up for the loss of oil from Iran.
U.S. crude stockpiles increased for a fifth successive week, rising by 6.35 million barrels in the week to October 19.
Also, with the outlook for global economic growth rather dim, given the likely impact of the ongoing U.S.-China trade war, geopolitical worries and corporate earnings concerns, it is being speculated that demand for oil will drop in the near term.
Crude oil futures for December ended up $0.26, or 0.4%, at $67.59 a barrel. For the week, oil futures lost about 2.4%, settling lower for a second straight week.
On Thursday, crude oil futures ended up $0.51, or 0.8%, at $67.33 a barrel.
Oil’s modest rise today may have come about thanks to some bargain hunting after recent losses and on hopes OPEC may resort to some production cuts towards the end of this year. According to Reuters, Saudi OPEC governor Adeeb Al-Aama said the oil market could shift into oversupply in the last quarter of the year and that OPEC may have to return to oil production cuts.