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Oil heads for third straight weekly loss as supply weighs

The oil and gas sector
The oil and gas sector

Oil prices edged higher, Friday as investors closed positions ahead of the end of the year though crude was still heading for a third weekly loss in a row, its longest losing streak in four months.

Global benchmark Brent crude prices were trading up 38 cents at $37.44 a barrel at Friday morning while U.S. crude futures traded at $35.02 a barrel, a rise of seven cents from Thursday’s close.

A global supply glut that brought prices close to 11-year lows this week means Brent oil prices will post losses for a third consecutive year, which would be the first time that has happened since oil trading started in the 1980s.

West Texas Intermediate (WTI) futures are set for a second straight yearly loss, the first time that will have happened for the U.S. oil pricing benchmark since 1998.

Many investors finished closing their books for 2015 on Friday ahead of the holiday break and some expected oil prices to rise further during the day as others closed out positions that had been benefiting from the slide in prices.

Still, traders were preparing for even lower crude prices next year by taking up more put options to sell U.S. crude in February should prices fall to $30, $25 or even $20 per barrel, according to Reuters data.

The seemingly unstoppable decline in oil is raising concerns about investment in future supplies, IEA Executive Director Fatih Birol said on Friday in Singapore.

“The current low oil price make me worried because it means lower investments in new oil projects,” he said.

“This year, oil investments declined more than 20 percent and more importantly we expect it will decline next year as well,” Birol said. “We have never seen in the last 30 years oil investments decline two years in a row in the world.”

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