Supply Glut Keeps Brent Near 13-Month Low
Brent crude oil found some support from a weaker dollar on Thursday, but remained under pressure as economic data from the eurozone fueled concerns about an oversupplied market.
The commodity traded at 102.15 at 8:30 GMT, near a 13-month low.
The dollar took a hit after the U.S. Labor Department released soft jobs data on Thursday, which showed that initial jobless claims unexpectedly rose last week.
The data weighed on the greenback as investors have been closely watching the U.S. job market, as it is seen as a key factor in the U.S. Federal Reserve’s decision to raise interest rates.
Although the number of claims for unemployment benefits has gone up, analysts say the figure isn’t worrisome as it remained near eight-year lows.
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Meanwhile, eurozone GDP weighed down crude prices as it compounded worries that global demand is not enough to combat the current market oversupply. The bloc showed no growth in the second quarter, and several member states reported contractions.
The figures are worrisome, as they represent the eurozone economy’s strength before it enacted sanctions against Russia, one of its largest trading partners.
The sanctions are likely to have a negative impact on economies across the bloc and bring GDP even lower in the third quarter.
Oil supplies have been increasing as OPEC members ramp up production, causing a supply glut. CNBC reported that the organization’s production in July was at 30 million barrels per day, a five month high.
Analysts see that figure rising even further as Libya restarts some of its eastern ports. The nation is expected to begin exporting from Es Sider, its largest port, over the next few days.
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