Fresh signs OPEC will continue to value market share over prices outweighed expectations of a lift when the United States kept interest rates at historic lows lead to oil markets remaining weak on Friday.
U.S. West Texas Intermediate (WTI) crude futures were trading at $46.72 per barrel at 0331 GMT, down 18 cents from their last settlement. Brent prices were at $49.12 per barrel, up 4 cents.
Kuwait, a key producer of the Organization of the Petroleum Exporting Countries (OPEC), said on Thursday the oil market would balance itself but that this would take time, indicating support for the group’s policy of defending market share despite falling prices.
Other sources at OPEC backed this view saying they expected oil prices to rise by no more than $5 a barrel a year to reach $80 by 2020, with a slowing in rival non-OPEC production growth not enough to absorb the current oil glut.
Oil prices were largely steady despite the U.S. Fed keeping interest rates unchanged on worries over the health of the global economy.
Analysts had suggested a weaker greenback – a usual result of low interest rates – would support oil, as it makes dollar-traded crude cheaper for countries using other currencies.
Yet because the Fed’s decision was based on economic concerns, some analysts and traders had a different view.
“It’s the Fed’s thinking behind holding rates that spooked us more than the impact of a weaker dollar,” said one crude trader.
“They kept rates low because they worry about the health of the global economy. That makes me worry about global oil demand,” the trader said.
“Shockingly, one (Fed) official thinks rates need to be cut, and not raised, before the end of 2015 … The sluggish economy is bound to weigh one way or another,” said Howie Lee of Singapore-based brokerage Phillip Futures.