Picture: REUTERS
Picture: REUTERS

London — Oil prices fell on Friday, shedding early gains on profit-taking ahead of the New Year holiday as global crude benchmarks moved back towards their lowest levels in more than a year.

Brent crude oil fell 56c to a low of $51.60 a barrel before recovering some ground to trade around $52.05 by 1pm GMT, having earlier risen more than 3%. The futures contract dropped 4.2% on Thursday. US light crude was last up 30c at $44.91, after rising 3.6% in early trade.

Oil prices fell to their lowest in almost 18 months this week and are down more than 20% for the year, depressed by rising US supply and concern over global economic growth.

Stock markets in Europe and Asia rose on Friday after Wall Street ended a volatile session with big gains, but fears of further price swings and worries about US politics kept investors cautious.

Traders appeared to be squaring their books ahead of expected light volumes on Monday and a market closure on Tuesday for the New Year’s Day holiday.

“Looks like some people in the US and UK got a nice opportunity to bail out of longs,” Sukrit Vijayakar, principal and trader at Trifecta Consultants in Mumbai, told Reuters Global Oil Forum.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said crude prices have been pressured by slowing economic growth “coupled with the expectation of strong US production in the new year”.

US crude inventories rose 6.9-million barrels to 448.2-million barrels in the week to December 21, according to the American Petroleum Institute (API). The US Energy Information Agency (EIA) will publish its data at 4pm GMT.

“If the EIA’s data shows a rise in US crude inventories, that would cap price gains,” Ahn said. The US has emerged as the world’s biggest crude producer this year, pumping 11.6-million barrels per day (bpd), more than both Saudi Arabia and Russia.

Russian energy minister Alexander Novak said on Thursday that Russia would cut its crude output by between 3-million and 5-million tonnes in the first half of 2019 as part of a deal between producers.

Earlier this month, oil cartel Opec and its allies, including Russia, agreed to cut output by 1.2-million bpd, or more than 1% of global consumption, starting in January. 

Reuters