By Dipo Olowookere
Oil prices resumed their downward spiral Tuesday after OPEC sparked fresh worries about an oversupply crisis with a forecast that global output will increase next year.
The commodity rallied for most of August on hopes for a production limitation deal at a meeting between OPEC and Russia this month, but it has taken a beating in recent weeks as traders grow cynical that the Algiers gathering will end in success.
The Organization of the Petroleum Exporting Countries yesterday predicted non-member countries would see output rise in 2017, revising its previous expectations of a drop.
Prices have seen wild swings this past week. On Thursday they surged more than two dollars after data showed US stockpiles fell the most in 17 years.
However, those gains were erased Friday as analysts said the inventories decline was because of the suspension of imports and shutdown of some production owing to a severe hurricane in the Gulf of Mexico.
“Oil prices are under pressure on renewed oversupply concerns,” Bernard Aw, an analyst with IG Markets in Singapore, told AFP.
Traders are keeping watch on the Federal Reserve ahead of a policy meeting next week, with speculation rife that it could lift borrowing costs.