NEW YORK: Oil prices steadied on Friday after New York crude reached a new multi-year low point against a backdrop of high supplies.
US benchmark West Texas Intermediate (WTI) for September hit $41.35 a barrel — the lowest level since March 2009.
It recovered to $42.22 a barrel, down one cent compared with Thursday’s close.
Brent North Sea crude for September rose 12 cents to stand at $49.34 a barrel in London afternoon deals.
Bernard Aw, a strategist at IG Markets, predicted prices to remain weak after the International Energy Agency (IEA) on Wednesday forecast the global crude supply glut to last into next year.
“The IEA assessment that the supply glut situation would be extended beyond 2015 continues to contribute to the pessimistic outlook for energy,” he said.
The Organization of the Petroleum Exporting Countries (Opec) this week said that its output in July rose by 100,700 barrels per day from the previous month to 31.5 million bpd.
The producer group’s refusal to cut its output level despite sagging demand is seen as a reason for a prolonged global oversupply, which has contributed to oil prices falling to almost a third of their mid-2014 peak.
Analysts have said the move is an attempt by the cartel’s kingpin Saudi Arabia to defend its market share as it fends off competition from US shale oil.
Oil prices fell this week also as traders tracked developments over China, the world’s biggest consumer of energy.
Commodity markets in general have been beset by China’s decision to devalue its currency in a bid to boost exports out of the Asian country, which is the world’s second biggest economy after the United States.
The move has supported the dollar, causing additional pressure for commodities priced in the greenback, by making them more expensive for holders of rival currencies.
