Investing.com – Crude oil prices fell sharply on Friday, dropping below USD99 a barrel as Saudi Arabia reportedly planned to increase production, while concerns over the global economic recovery weighed on demand expectations.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD98.85 a barrel by close of trade on Friday, edging 0.05% higher on the week.
It earlier fell to USD98.58 a barrel, the lowest price since June 8, after the London-based Saudi-al-Hayat Newspaper reported that Saudi Arabia planned to increase production to 10 million barrels per day in June, up 13% from May and the highest level in 30 years.
Global financial service provider JP Morgan noted that the 10-million barrel increase would raise production by 500,000 barrels per day from current levels.
The report comes after the Organization of Petroleum Exporting Countries failed this week to agree on output in what Saudi Oil Minister Ali al-Naimi said was “one of the worst meetings” ever.
Saudi Arabia, Kuwait, Qatar and the United Arab Emirates voted for a 1.5 million-barrel-per-day increase in oil production, while Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to the increase, according to OPEC delegates.
Meanwhile, China reported a trade surplus of USD13.1 billion in May, significantly below expectations for a surplus of USD19.1 billion, as export growth slowed. The downbeat data added to concerns over the pace of the global economic recovery.
China is the world’s second largest crude oil consumer, with the International Energy Agency forecasting that China will account for approximately 40% of global oil demand growth in 2011.
A broadly stronger U.S. dollar also pressured prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.87% on Friday to settle at 75.25, the highest since May 27. On the week, the index gained 1.4%.
Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery traded at USD118.02 a barrel by close of trade on Friday. The Brent contract climbed 1.65% on the week and was up USD19.17 on its U.S. counterpart, after earlier trading at a record premium of USD19.49.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD98.85 a barrel by close of trade on Friday, edging 0.05% higher on the week.
It earlier fell to USD98.58 a barrel, the lowest price since June 8, after the London-based Saudi-al-Hayat Newspaper reported that Saudi Arabia planned to increase production to 10 million barrels per day in June, up 13% from May and the highest level in 30 years.
Global financial service provider JP Morgan noted that the 10-million barrel increase would raise production by 500,000 barrels per day from current levels.
The report comes after the Organization of Petroleum Exporting Countries failed this week to agree on output in what Saudi Oil Minister Ali al-Naimi said was “one of the worst meetings” ever.
Saudi Arabia, Kuwait, Qatar and the United Arab Emirates voted for a 1.5 million-barrel-per-day increase in oil production, while Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to the increase, according to OPEC delegates.
Meanwhile, China reported a trade surplus of USD13.1 billion in May, significantly below expectations for a surplus of USD19.1 billion, as export growth slowed. The downbeat data added to concerns over the pace of the global economic recovery.
China is the world’s second largest crude oil consumer, with the International Energy Agency forecasting that China will account for approximately 40% of global oil demand growth in 2011.
A broadly stronger U.S. dollar also pressured prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.87% on Friday to settle at 75.25, the highest since May 27. On the week, the index gained 1.4%.
Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery traded at USD118.02 a barrel by close of trade on Friday. The Brent contract climbed 1.65% on the week and was up USD19.17 on its U.S. counterpart, after earlier trading at a record premium of USD19.49.