On Friday, last week, oil price settled at lower side, losing 4% on the week. This signifies the possible chances of global crude glut once again.
Crude futures were already down, as Brent hits two months’ low. Amidst the fear of rise of Iraqi supply, energy services firm Baker Hughes showed US oil drillers added 14 rigs this week to bring the total rig count to 371.
Pete Donovan, broker at Liquidity Energy in New York, said, "The oil complex is already struggling with oversupply issues. More than ample inventories and upcoming refinery turnarounds and maintenance have the bulls on the defensive."
Brent settled down 51 cents, or 1.1%, at $45.69 a barrel, after falling to $45.17, the lowest since May 11. For the week, Brent lost 4 percent.
US West Texas Intermediate (WTI) crude closed down 56 cents, or 1.3%, at $44.19. It fell 3.8% on the week. The dollar's rally to a more than four-month high also hurt demand for greenback-denominated oil among holders of the euro and other currencies.
Oil export from Iraq was anticipated to rise in the month of July. Industry source confirmed that OPEC's No. 2 producer back on track for supply growth after a two-month lag.
Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates stated, "These large and increasing stocks will not only up the likelihood of additional commercial short hedges, but will also encourage the commercials to defer long hedges."
Recently, the US government reported that domestic crude inventories were at 519.5 million barrels of late, and this figure is historically high for this time of the year. On Thursday, traders said market intelligence firm Genscape reported a build of 725,176 barrels in the latest week at the Cushing, Oklahoma delivery point for US crude futures.
Falling oil prices have encouraged traders to send US supplies to Europe, counterbalancing 700,000 barrels per day in lost Nigerian supply. US, European and Asian oil product stocks rose 2.35 million barrels last week for a second week of growth.
Giovanni Staunovo, USB oil analyst, stated, "The narrative of a balanced oil market (in the second half of 2016) has so far been an illusion."