Oil prices slipped on Friday as surging U.S. supply and concerns of global economic slowdown kept a lid on further gains.
International Brent crude futures were at $66.15 per barrel, down 15 cents, or 0.2 percent, from their last settlement. U.S. West Texas Intermediate (WTI) crude oil futures were at $57.06 per barrel, down 16 cents, or 0.3 percent.
Despite this signs the oil market is tightening, there are signs that point to a more amply supplied market heading further into 2019.
The U.S. Energy Department said on Thursday it was offering up to 6 million barrels of crude from national emergency reserves to raise funds to modernize the U.S. strategic oil reserves.
On the demand side, a Reuters poll showed analysts expect global fuel demand to slow this year amid a broad economic slowdown.
“Persistent economic weakness ... will prevent exponential gains in crude oil futures amidst existing bearish pressures on global petroleum demand,” Benjamin Lu, commodities analyst at Phillip Futures, said on Friday.
China’s February factory activity fell for a third month as the world’s second-largest economy continued to struggle with weak export orders, a private survey showed on Friday.
The weakness is being felt across the region. South Korea’s exports contracted at their steepest pace in nearly three years in February as demand from its major market China cooled further in yet another sign of faltering momentum in Asia’s fourth-largest economy.
Despite this, fuel consumption especially in Asia’s developing economies, which are key drivers of global oil demand, is so far holding up.
India’s diesel consumption, for instance, is expected to rise to a record this year amid a strong expansion of its heavy duty vehicles amid economic growth of around 7 percent.