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Oil slips further on concerns about higher supply

Oil slips further on concerns about higher supply

10/03/2017

By Sarah McFarlane

Oil prices eased further on Tuesday as the rally that took Brent to a more-than-two-year high ran out of steam.

Brent crude , the global oil benchmark, eased 0.3% to $55.95 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.2% at $50.46 a barrel.

Prices advanced in September on projections for tightening supply, but have subsequently reversed gains to fall more than 5% in the past week.

"What the market is always concerned about is as the price goes higher, the world produces more, and prices are capped," said Richard Fullarton, founder of London-based hedge fund Matilda Capital Management Ltd.

Read:Banks cut oil-price forecasts on worries about oversupply (http://www.marketwatch.com/story/banks-cut-oil-price-forecasts-despite-recent-rally-2017-10-03)

Investors are watching the Organization of the Petroleum Exporting Countries for signs of whether its members will extend their production cuts beyond the current end date of March 2018.

"A smart move for OPEC would be to keep the cuts in place for longer than the people expect, to create a new base for oil prices," said Fullarton.

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