Oil heads for another weekly decline on glut woes
Oil prices headed for a second week of declines on Friday as an unabating supply glut weighed even as China's latest interest rate cut raised hopes for stronger demand from the world's top energy consumer.
Benchmark Brent crude oil fell 38 US cents to US$47.70 a barrel in early trade, and was on course for a weekly decline of more than 5.5 per cent.
US crude for December was down 88 US cents at US$44.50 a barrel, on course for a near 6 per cent weekly decline.
China’s latest rate cut was offset by persistent concerns over a glut in global crude oil and refined product supplies which have battered the energy market for over a year.
“The rate cut does give some support to demand expectations so oil's gone a bit higher and it's a little bit positive for the moment,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
“However, as soon as supply data comes out, and people see we are in an oversupplied market, sentiment will come off.”
US oil inventories climbed by a larger-than-expected eight million barrels to 476.6 million last week.
Investors also awaited rig data on Friday for guidance on how US oil production has responded to recent price falls.