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Oil market spooked by growing supply

On Friday, August 13, oil prices posted steep declines again, with Brent breaching the $70 support level, down 1.4% to $69.84/bbl, while WTI tumbled 1.5% to $67.69/bbl.

The Baker Hughes weekly report, released on Friday evening, spooked the market as oversupply fears resurfaced. According to the report, the number of active US oil rigs increased by 10 units to 397 over the past week, and alongside an increase in OPEC+ oil output, the market again started to worry that global demand will be insufficient this year to absorb such an increase in the supply of crude oil.

The decline in oil prices gained impetus earlier this morning, likely amid a change of government in Afghanistan, creating a negative background for the global economy as a whole, and on fears of a slowdown in economic growth in China after the release of today's data flagging a slowdown in the growth of retail sales and industrial production in the country. As a result, Brent shed as much as 1.27% this morning, dropping below $69/bbl. At the time of writing, Brent was straddling both sides of the $70.00 mark, while WTI price slid 1.38%, breaking through the support level at $67 before rebounding slightly higher. Our Brent price forecast for today is in the range of $ 68.5-70.0/bbl.

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