By Adedapo Adesanya
Oil prices further went the negative route on Friday, dipping more than 2 per cent as fresh demand worries emerged.
It has been feared that refineries will take time to resume operations after the cold weather in southern parts of the United States.
As a result, the Brent crude lost $1.29 or 2.02 per cent to sell at $62.64 per barrel, while the United States’ WTI crude lost $1.68 or 2.78 per cent to trade at $58.84 per barrel.
Both benchmark contracts rallied to 13-month highs on Thursday, driven by the historic freeze in southern states in the US, with analysts estimating that the extreme cold has shut in as much as one-third of US crude production.
Now, attention has turned to the effect of the big freeze on refiners who worry that it will take time to resume operations.
Investors were also concerned that supplies by the Organization of Petroleum Exporting Countries and its allies (OPEC+) were expected to rise.
This followed a decision by oil producer, Saudi Arabia, to increase its oil output in the coming months, reversing a recent big production cut, a sign of growing confidence in an oil-price recovery.
The world’s largest oil exporter surprised oil markets last month when it said it would unilaterally slash one million barrels a day of crude production in February and March in an effort to raise prices.
But the Kingdom plans to announce a reversal of those cuts when a coalition of oil producers meet next month, with the rise expected to kick-start in April.
There is also the possibility of expected crude oil stockpile build in the United States due to the low demand over the weather situation.
US crude stockpiles fell more than expected in the week to February 12, before the freeze, with inventories down by 7.3 million barrels to 461.8 million barrels, their lowest since March, the US Energy Information Administration (EIA) reported on Thursday.