Oil prices fell during Asian trade on Friday after breaking the $50 barrier
Oil prices dropped during Asian trade on Friday after climbing up to $50 for the first time in around seven months the previous day.
Prices were pressured by concerns that passing through the $50 level would prompt producers to boost output, in addition to the dollar index gaining against a basket of major currencies.
Brent dropped 19 cents, or 0.38%, to $49.20 by 04:51 GMT on Friday from an opening price of $ 49.39 per barrel, while WTI oil dropped 19 cents, or 0.38%, to $49.12 a barrel from its opening price of $49.31 per barrel.
“WTI and Brent futures went through $50 a barrel on tightening supply, but unsurprisingly hit stubborn resistance at that key level and then eased back,” read an ANZ note on Friday.
Crude prices briefly broke the $50 a barrel barrier in intraday trading Thursday – its highest level since October and nearly 90 percent up from 12-year lows hit earlier this year.
The rise in oil prices on Thursday prompted concerns about a possible output increase amid an already over-supplied market.
According to a report published by the WSJ, oil hitting $50 a barrel may boost “some smaller producers in places like the U.S. shale fields,” but noted that “many American producers have said $50 oil won’t spur them to rush out and tap new wells.”
The head of EOG Resources Inc., Bill Thomas, told the Journal: “In the U.S. it will take a sustained $60 to $65 oil price and 12 months of lead time for the industry to deliver a modest level of growth,”