Oil Holds Near Lowest Since October With Surplus in Focus
Oil held near its lowest close in almost two months, as concerns about an oversupply offset bullishness in wider financial markets.
Brent traded little changed above $61, reversing an earlier increase. Global stock gauges have record highs in their sights as the Federal Reserve’s interest-rate cut this week and its upbeat assessment of the US economy boosted investor sentiment, but oil markets remain pressured by the prospect of a significant surplus next year.
Concerns about oversupply have helped to push crude toward the lower end of a band it has traded in since mid-October, with Brent futures slowly trending toward $60. The International Energy Agency on Thursday reiterated its prediction for an unprecedented surplus — although slightly below its forecast last month — and said global inventories have swollen to a four-year high.
“Traders are happy to buy a bit of risk across the board, but the fundamental surplus hasn’t gone anywhere,” said Haris Khurshid, Chicago-based chief investment officer at Karobaar Capital LP.
Geopolitical tensions may add some support to oil prices. President Donald Trump announced new sanctions on three of Venezuelan counterpart Nicolas Maduro’s nephews as well as six oil tankers, after the US seized a supertanker off the coast of the Latin American nation on Wednesday.
The ship seizure was just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against the Venezuelan president, according to people familiar with the operation. The act of economic statecraft is designed to deny Maduro a lifeline of oil revenue and force him to relinquish power, the people said.
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