Oil prices fell on Friday, erasing more of the gains realised after the 14 September attacks on Saudi Arabian oil facilities, as the rapid return of production capacity from the world's top exporter squashed risk premiums.
Prices were also pressured by worries of weak global economic growth and its effect on oil demand.
Brent crude futures fell 32 cents, or 0.5%, from the previous session's close to $62.42 a barrel by 0131 GMT.
US West Texas Intermediate (WTI) crude futures fell 8 cents, or 0.1%, to $56.33 a barrel.
“For most of the week... the market has been trading lower as oil bulls have been discouraged by the quicker-than-expected return of Saudi oil output,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
WTI futures were down 3% so far for the week, marking the largest weekly loss in 10 weeks, while Brent was down 2.9% on the week, its largest weekly loss in seven.
Saudi Arabia had brought its production capacity back to 11.3 million barrels per day (bpd) less than two weeks after the attacks on it oil facilities, sources briefed on the matter told Reuters this week.
The attacks, which knocked out 5.7 million bpd of production, initially sent oil prices up 20% although they dropped soon after as the kingdom pledged to bring back output by the end of September.
A surprise 2.4 million-barrel build in US crude inventories last week also weighed on prices.
US inventories may rise further over the near term, further pressuring prices, as US refiners curb runs for maintenance, analysts said.
“The expected lower demand for oil inputs into (US) refineries typically sees US crude inventories swell, all of which could pose a significant downside risk for prompt oil prices,” Innes said.
Just R20 for the first month. Support independent journalism by subscribing to our digital news package. 