Oil Dips Ahead G-20 Summit

Crude slipped on Friday, mainly depressed by ample supply but underpinned by a Caribbean storm which might move towards the Gulf of Mexico, where oil facilities are clustered and BP continues to fight an oil spill.

Worries about the fragility of global economic recovery ahead of a summit of Group of 20 nations was additionally weighing on prices and overshadowing global markets.

By 0855 GMT, United States crude futures fell 34 cents to $76.17 a barrel, heading for the first weekly decline in three weeks.

Brent crude futures fell 47 cents to $76.00.

“Two topics are dominating today. One is a hurricane is forming now, which is supportive to the market.

“And we have a looming problem of very high inventories worldwide, which offsets the support and is putting prices in a very tight range,” said Andy Sommer, energy market analyst with EGL in Switzerland.

“The market is, of course, watching the G20 meeting and the Chinese yuan situation,”

Ahead of the G20 summit, MSCI’s all-country world index was down 0.2 per cent, heading for a 2.7 per cent weekly loss.

European shares were bucking the trend, however, with the FTSEurofirst 300 up 0.3 per cent after three days of losses.

The dollar made little headway.

In the United States, the world’s top oil market, crude oil and product inventories remained much higher than a year earlier levels.

High inventory levels can provide a cushion to reduce price spikes should bad weather cause supply disruptions.

This was the case when deadly hurricanes Katrina and Rita hit the US Gulf of Mexico in 2005.