Oil prices dip on economic concerns, demand worries

Attacks this year helped to cut Nigeria’s monthly oil output to about 1.4 million barrels a day in May, the lowest in nearly three decades, according to the IEA.

In London, Brent crude for delivery in August, the global benchmark, finished at $50.61 a barrel, also a gain of $2.03 from Tuesday s settlement.

Oil prices have taken another tumble over concerns about the United Kingdom’s recent vote to exit the European Union (EU).

“Oil did find support overnight, though it looks poised for more downside today, given reports of an impending uptick in OPEC production”, said analysts at Accendo Market, in a note.

The Niger Delta Avengers militant group has claimed responsibility for five new attacks on Nigeria’s oil infrastructure over the weekend, dealing a blow to the government’s effort to enforce a cease-fire.

The data alleviated some concerns about the impact of Brexit on global growth, boosting share prices on Wall Street and crude futures, which were down about 5 percent in the past two days.

“Crude oil prices are back well below US$50 after Nigerian production was ramped up afresh, tipping the balance of drivers further towards the bearish”, said Michael van Dulken and Augustin Eden at Accendo Markets.

US markets are closed on Monday for the US Independence Day holiday.

The latest American Petroleum Institute (API) weekly inventory data recorded a draw of 6.7mn barrels compared with the expected draw of around 2.3mn barrels and followed the draw of 3.9mn barrels recorded last week.

Gasoline demand rose slightly last week, the Energy Information Administration said Thursday, but stockpiles of the fuel fell less than expected and held above average levels for this time of year.

Gasoline stockpiles along the US East Coast surged to a record 72.5 million barrels in the week ended 24 June, EIA data show.

The news comes as the Organization of the Petroleum Exporting Countries (OPEC) is said to have increased crude production last month.

“The worst has come and gone”, said Vyanne Lai, the energy analyst at National Australia Bank, cautioning, however, that as some supply disruptions are coming to an end, oil output may tick back up. In addition, the stronger USA currency may weigh on oil prices by making dollar-traded oil more expensive for foreign buyers.

Brent crude settled up 84 cents, or 1.8 percent, at $48.80 a barrel.