Oil drops 1% as analysts warn of near-term weakness

The international oil price, which has been trading near a three-year high this week, dipped in Asia trading on Friday as analysts warned of near-term weakness in the market.

Brent crude, the international benchmark, was down 1 per cent at $68.64 a barrel ahead of the beginning of the trading day in London.

ANZ analysts said earlier on Friday that while a weaker US currency and positive market fundamentals had boosted oil prices this year, an “upcoming soft patch in demand and extreme investor positioning does open up the possibility of some short-term weakness”.

“However, this will not open the gates to a full-blown sell-off,” the bank’s analysts said. “We expect Brent to pull back to the mid-60s in the next three months before more unplanned disruptions provide further support.”

Brent closed overnight at $69.31 a barrel and has pulled back from Monday’s three-year intraday high of $70.37 a barrel.

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