(Bloomberg) -- Oil slid to a three-week low, closing near $67 a barrel, after a wave of technical selling compounded oversupply fears.
A decision by OPEC and its allies to return output at a slower pace than initially planned capped losses Friday, but a looming supply glut continued to weigh on prices. Both WTI and Brent met resistance at their short-term moving averages, prompting algorithmic traders known as CTAs to enter the market and extend losses on Friday.
“CTAs are selling Brent crude in response to deteriorating trend signals, which should further weigh on crude prices,” Daniel Ghali, a commodity strategist at TD Securities, said in a note. Ghali expects sizable selling activity for oil in the coming week, even if prices remain relatively stable.
WTI found a floor after testing $67, a technical support that the US benchmark has rarely breached in the past several weeks, said Fawad Razaqzada, a market analyst at City Index and Forex.com.
OPEC and its allies on Thursday opted to start with a modest output increase in April and unwind the cuts over 18 months, a slower pace than previously planned. The deferral was aimed at offsetting a seasonal demand lull early next year, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman told CNBC on Friday. Banks still largely expect a surplus in 2025 as Chinese demand growth cools and production from the Americas swells.
Crude has been range-bound since mid-October, with bullishness from geopolitical developments in the Middle East and Ukraine countered by expectations of a glut in 2025. The potential for Trump administration tariffs and possible sanctions on Iran also are injecting uncertainty into the market.
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--With assistance from Grant Smith.
(A previous version of this story corrected the date of the Saudi energy minister’s interview)