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Oil prices, down about 30 percent since March, will likely stay under pressure for now based on record global production and softer demand.
West Texas intermediate was trading higher Friday, bouncing more than a percent off its Thursday close of $78.20 per barrel. Brent , the international benchmark, rose back above $90 per barrel Friday.
Despite the blip, though, analysts see oil headed further down.
The reason? The world is now pumping 91.1 million barrels per day, the most ever. At the same time, global demand in May was 89.9 million barrels per day, the International Energy Administration reported.
OPEC production, at more than 31.5 million barrels in May, was also higher than normal, though OPEC last week vowed to maintain its production at 30 million barrels per day.
Crude, like stocks and other risk assets, was part of a turbulent sell off Thursday as fears of slowing global growth gripped markets, which were also beset by speculation about pending bank downgrades and Europe’s sovereign crisis.
John Kilduff of Again Capital said after oil sinks through $78, the next level he is watching is $72 per barrel for WTI. Oil fell this week after the Federal Reserve held off a return to its quantitative easing program, seen as a catalyst for commodities and stock prices.
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