Oil prices remained on track for sharp weekly declines in midmorning trade on Friday, despite hopes that Saudi Arabia was determined not to flood markets with exports, as traders looked ahead to the latest weekly data on U.S. production.
New York-traded West Texas Intermediate crude futures fell 39 cents, or 0.57% to $67.85 a barrel by 10:15 AM ET (14:15 GMT), as U.S. crude was unable to hold on to gains seen overnight.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded up 19 cents, or 0.26%, to $72.77, far from an intraday high of $73.47.
Saudi Arabia’s OPEC governor Adeeb Al Aama said that exports in July from the cartel’s top producer would be roughly in line with the 7.2 billion barrels per day that were exported in June, according to a Dow Jones report.
He further noted that the kingdom plans to cut exports by roughly 100,000 barrels per day in August as it works to ensure it does not push oil into the market beyond customers' needs, avoiding worries that oversupply would curtail prices.
Al Aama indicated that concerns that Saudi Arabia, OPEC’s largest producer and the cartel’s de facto leader, and its partners would oversupply markets are “without basis,” providing some support to the current bearish trend in black gold.
U.S. crude and Brent were on track for weekly losses of 3.8% and 2.8%, respectively, with both barrels down roughly 8% for the month of July.
OPEC and non-OPEC countries led by Russia had agreed to decrease their curbs on output in order to compensate for shortfalls seen in other producers. But Libya recently reopened its ports, exporting oil again and adding to worries that production increases would lead to a supply glut.
Trade war concerns have also pummeled oil prices as investors worried that a negative impact on the global economy could debilitate demand.
U.S. production will also be in focus later Friday when Baker Hughes releases its weekly report on drilling activity. The U.S. oil rig count remained unchanged at 863 last week, as drillers appeared to hold output steady given the decline in prices.
In other energy trading, gasoline futures rose 0.66% $2.0606 a gallon by 10:17 AM ET (14:17 GMT), while Heating Oil advanced 0.32% to $2.0968 a gallon.
Natural gas futures edged down 0.11% to $2.766 per million British thermal units.