Oil prices slump due to crude oversupply
US benchmark West Texas Intermediate (WTI) for delivery in December was trading down 37 cents at $40.17 a barrel.
Brent North Sea crude for January delivery dipped two cents to $44.16 compared with Thursday’s close.
WTI briefly fell below $40 in US trade Thursday before recovering to close above that level.
“WTI once again came under pressure, dipping below key $40 before recovering slightly, as US crude stockpiles continued to increase, keeping inventories over 100 million barrels above the five-year average,” said Bernard Aw, a strategist at traders IG Markets.
He said the market would be watching if oil prices at near $40 will boost oil demand as expected by some crude producing nations.
Members of the Organization of Petroleum Exporting Countries have so far resisted pressure to slash lofty output levels to ease the oversupply and prevent a further slide in oil prices.
Key OPEC members led by Saudi Arabia prefer to maintain market share by keeping output high amid competition from non-OPEC producers like the United States.
A stronger dollar, bolstered by expectations of a raise in US interest rates next month, is also helping push oil prices lower.
The commodity is traded in the US currency so a strong dollar typically dampens demand and prices by making oil more expensive to holders of weaker units.