LONDON: Brent crude oil futures slipped on Friday towards $93 a barrel, extending a three-day slide that has pushed prices to their lowest since 2012, as abundant supplies and a strong dollar continued to weigh on the market.
Brent for November delivery was down 35 cents at $93.07 a barrel by 1033 GMT.
On Thursday Brent touched $91.55 a barrel, its lowest since June 2012. US November crude slipped 8 cents to $90.93 a barrel. It has lost around $2 this week, its steepest weekly fall in a month.
It hit $88.18 in the previous session, its lowest point since April 2013.
The spread between the front month Brent and US crude futures contracts reached its narrowest since August 2013 at $2.15 a barrel in early trading, reflecting supply pressure on Brent and weak demand in Europe, where an overhang of unsold North Sea and West African barrels persists.
"Global concern over declining economic growth and waning demand combined with a robust supply continue to weigh on the global oil market," said Dorian Lucas, an analyst at energy consultancy Inenco.
The strong dollar is also hurting the commodities complex, up 0.43 percent against a basket of currencies by 1042 GMT. A strong dollar makes commodities priced in dollars more expensive for buyers using other currencies.
"I was bearish, and I'm even more bearish now," said Bill Hubard, chief economist at Bankor.
"As long as we have a dollar rally, we will see a move out of commodities." The Brent crude benchmark is set to end the week down for the fourth week in five, having fallen more than 15 percent this year. There was a slight retracement of Thursday's losses early in the session, but the overall trend remains to the downside.
Traders and analysts said the small bounce had been driven by short-covering as people laid in protection ahead of the US non-farm payrolls data. Economists polled by Reuters forecast a rise to 215,000 in September, rebounding from a disappointing 142,000 in August.
AMPLE SUPPLY
Geopolitical tensions in the Middle East, eastern Europe and Asia have failed to prevent a slide in the oil price over the summer.
Although Islamic State insurgents have advanced across northern Iraq, this has had little impact on oil production in the south to date.
Some analysts say that only a cut in output by the Organization of the Petroleum Exporting Countries (OPEC) will rescue oil prices. Although some OPEC countries are calling for supply cuts, other core members are betting that winter demand will revive the market, suggesting the group is no closer to any collective steps.
Saudi Arabia's move on Wednesday to cut official oil sale prices (OSPs) to Asian customers helped to send prices sharply lower.
The move was seen as a strong sign it is trying to compete for crude market share and keep markets well supplied.
"Saudi Arabia isn't going to turn the spigot off -- for the Saudis this price is still profitable," said Hubard.
"There is definitely more to come on the downside. Although it is not optimal for Saudi Arabia they can cope with lower prices better than most and they may reap a dividend if lower prices choke off fresh non-OPEC production," added Christopher Bellew, a broker at Jefferies in London.
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