Oil prices slide as the strong supply outweighs the cut

Through Erwin Seba Houston (Reuters) oil prices dropped on Friday, as the concerns about major supplies and the falling demand exceeded expectations that the year’s first interest rate by the US federal reserve would cause more consumption. Brent -Ru futures were 97 cents, or 1.44%, at $ 66.47 a barrel at 10:42 AM CDT (1542 GMT), while the US interim futures of the US West Texas lost 72 cents, or 1.13%, to $ 62.85. Both benchmarks were still on track for a second consecutive weekly profit. Andrew Lipow, president of Lipow Oil Associates, is still saying about oil production. “We haven’t seen an impact on the export of Russian crude oil yet.” The Fed lowered its policy rate by a quarter percentage point on Wednesday, indicating that more cuts would follow as it responds to signs of weakness in the job market. Lower borrowing costs usually increase the demand for oil and push prices higher. “The market is caught between conflicting signals,” said Priyanka Sachdeva, an analyst from Phillip Nova. As far as the demand side is concerned, all energy agencies, including the US Energy Information Administration, have the concerns about the weakening of demand, and the expectations of significant price on the short term have indicated upside down, Sachdeva said. Lipow pointed out that the demand for refineries will continue to fall to crude oil. “The reversal season of the refinery will further reduce the question,” he said. Refineries include production units in the spring and autumn for renovation called turnaround. A higher -than -expected 4 million barrels to US distilled stock raised concerns about the demand in the world’s best oil consumer and under pressure prices. [EIA/S] The latest economic data also led to the concern, with the softening of the US job market, while single-family home building in August dropped to a perennial low, discouraged by a wave of unsold new homes. One factor that holds back oil prices is an uneven economic recovery, especially in the US, said Tamas Varga, analyst of PVM Oil Associates. “The corporate sector benefits from continuous deregulation, while consumers begin to experience the pressure of import tariffs, with both the labor and housing markets showing signs of weakness,” he said. (Reporting by Erwin Seba in Houston, Stephanie Kelly in London; additional reporting by Sudarshan Varadhan; editing by David Goodman, Jan Harvey and David Gregorio)