September West Texas Intermediate Crude Oil futures struggled on the upside from the start and are likely to finish lower for the week. The selling started on Tuesday after the long U.S. holiday weekend amid signs of a resurgence in Libya’s output and on concerns that the OPEC-led production cuts may not be enough to trim the global supply glut.
According to the chief of the state-run National Oil Corporation, Libya’s oil production was at 784,000 barrels per day (bpd) because of a technical issue at the Sharara field, but was expected to start rising to 800,000 bpd.
Sellers were also reacting to the news from energy services firm Baker Hughes, which reported that U.S. drillers had added oil rigs for the 19th straight week, bringing the number of rigs operating in the United States to 722, the highest level since April 2015.
Adding to the bearish news was a new report from Goldman Sachs, calling for lower oil prices if falling production costs kept supply rising for years to come. According to the bank, once OPEC’s production growth resumes after its self-imposed cuts, U.S. and OPEC output would rise by 1 million to 1.3 million bpd between 2018 and 2020. This report seemed to be the blueprint followed by traders most of the week.
Bullish traders tried to build support for prices by bringing up the possibility of increased demand due to the start of the U.S. summer driving season.
Prices continued to slide in mid-week, taking…