Brent crude oil prices slid away from 2019 highs more than $65 per barrel reached earlier on Friday, as financial worries countered OPEC-led supply cuts and a partial stoppage of Saudi Arabia’s largest offshore oil field.
Brent increased as far as $65.10, pushing previous the $65 mark for the first time this year, before falling back to $64.69. That was still 0.2 percent above the last close.
The worldwide benchmark for oil prices
U.S. West Texas Intermediate (WTI) crude futures were at $54.45 per barrel, up 4 cents from their last settlement.
Traders said prices were buoyed by the partial closure of Saudi Arabia's Safaniyah, its largest offshore oil field with a
The stoppage happened prior this week, a source said, and it was not immediately clear when the field would return to full capacity.
The partial stoppage comes on top of voluntary supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia the de-facto leader, aimed at tightening the market.
"Brent should average $70 per barrel in 2019, helped by voluntary (Saudi, Kuwait, UAE) and involuntary (Venezuela, Iran) declines in OPEC supply," Bank of America Merrill Lynch said in a note.
It also anticipates "a 2.5 million barrels per day drop in OPEC supply from 4Q18 into 4Q19".
In spite of Friday's bullish market, there are signs of a stoppage in demand, which traders said had pulled crude prices down from the prior highs.
"Maintenance season finally materialized this week, with (U.S.) refinery utilization decreasing by a sharp 480 basis points week-on-week to 85.9 percent," U.S. investment bank Jefferies said on Friday.
Faltering financial development is also a worry, with signs of a stoppage now abundant in Europe, Asia and the United States.
"Our macroeconomic view remains firmly bearish," said commodities brokerage Marex Spectron.
Surging U.S. yield may also undermine OPEC's efforts to tighten the market.
U.S. crude manufacture increased by above 2 million bpd a year ago, to 11.9 million bpd, making the United States the world’s largest oil manufacturer.
Most analysts expect U.S. yield to increase past 12 million bpd soon, and maybe even hit 13 million bpd by the end of the year.
Rising U.S. shale oil supply, increasing spare capacity in OPEC and stagnating fuel consumption meant the medium-term oil price outlook was lower, BoAML said.
"We see growing downside risks to medium-term oil prices on rising U.S. supply and slower consumption," the U.S. bank said. It expected Brent to range between $50 and $70 per barrel in the coming five years.