NEW YORK: Oil fell for the second straight day on Friday, with investors taking more profits from the week’s gains after Saudi Arabia’s readiness to raise production to record highs reignited worries about oversupply.
Gasoline also fell, retreating from seven-month highs. Even so, the fuel had one of the strongest fundamentals on the US oil complex, traders said, due to runaway demand from relatively low pump prices and seasonally busy road travel.
Greece’s debt crisis dominated sentiment on global markets, helping the dollar stay steady against the euro and keeping a lid on crude’s rebound. A stronger greenback makes oil, sold in dollars, less affordable to euro holders.
After Thursday’s 1 percent drop, crude extended its downdraft by another 1 percent as Saudi Arabia said it was in talks with Indian buyers to supply additional oil, meaning it could top the record 10.3 million barrels per day produced in May.
Saudi Arabia and others in the Organization of the Petroleum Exporting Countries already produce 1 million to 2 million bpd above their collective target of 30 million bpd.
“I think oil is stuck in a range until we get clearer info on inventory trends,” said ICAP crude oil broker Scott Shelton.
US crude was down 77 cents at $60 a barrel by 11:13 a.m. EDT (1513 GMT).
Brent crude slipped 63 cents to $64.48.
For the week, both Brent and US crude were up 2 percent.
The International Energy Agency said on Thursday it expected world oil demand to rise more than expected this year on the back of economic recovery and a relatively cold winter in the northern hemisphere.
But JBC Energy analysts said the IEA focused on the first half of 2015, meaning demand would tail off by the year-end.
“We believe … growth will likely slow as the price-driven demand upswing of recent quarters fades” over the second half, the analysts wrote.
US drilling rig data later on Friday will indicate whether more oil or less could be expected in coming months. The rig count is at 2010 lows after 26 straight weekly declines.
“Prices continue to grind lower, but improving demand prospects and the rig count data due later today seem to slow the decline,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.