Crude Oil Prices Slump to Weekly Loss as Oversupply Concerns Resurface

Investing.com
Crude oil prices posted a weekly loss for the first time in 4 weeks
Crude oil prices posted a weekly loss for the first time in 4 weeks

Investing.com – Crude oil prices settled lower on Friday as investor attention shifted to a potential disruption to energy infrastructure in the Gulf of Mexico as Tropical Storm Nate bears down on the region amid renewed oversupply concerns.

On the New York Mercantile Exchange crude futures for November delivery fell 2.95% to settle at $49.29 a barrel, while on London's Intercontinental Exchange, Brent 2.23% to trade at $55.70 a barrel.

Crude oil prices slumped to a weekly loss for the first time in four weeks as investors braced for a potential disruption to some oil production in the Gulf of Mexico as Tropical Storm Nate is expected to arrive as a Hurricane on Sunday.

Concerns over a potential disruption in the region come amid renewed fears of an uptick in crude supplies as the wide gap between Crude and Brent prices is expected to incentivize US producers to ramp up production and exports.

Meanwhile, investors continue to monitor ongoing geopolitical uncertainty in Iraq as the fallout over an independence referendum in Iraq’s Kurdistan region threatens to disrupt supply.

The independence vote angered Iraq’s central government and neighboring countries including Turkey. Turkey’s President Recep Tayyip Erdoğan warned last week that his country could “close the valves” on the pipeline that carries 500,000-600,000 barrels of crude per day from northern Iraq to the Turkish port of Ceyhan.

In the U.S., oilfield services firm Baker Hughes said Friday its weekly count of oil rigs operating in the United States fell by 2 to 748.

The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.

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