Oil inches up on Middle East supply concerns
Shafaq News/Oil prices inched higher on Friday as investors weighed supply concerns in theMiddle East, although signs of weakened demand limited gains.
Brent crudefutures for October delivery , which expire on Friday, were up 23 cents, or0.3%, at $80.17 a barrel by 0410 GMT. The more actively traded contract forNovember rose 20 cents, or 0.2%, to $79.02.
U.S. WestTexas Intermediate crude futures gained 18 cents, or 0.2%, to $76.09.
Bothbenchmarks settled more than $1 higher on Thursday on oil supply concerns, up1.5% and 1.7% respectively for the week so far.
"Ongoingconcerns over dented Libyan supplies were magnified by Iraq's plans to tameproduction, which together can dent the global supplies of oil," saidPriyanka Sachdeva, senior market analyst at Phillip Nova.
"However,the somber economic outlook of mainland China, the world's largest importer ofcrude oil, continues to be a constant headwind on oil demand."
More thanhalf of Libya's oil production, or about 700,000 barrels per day (bpd), wasoffline on Thursday and exports were halted at several ports following astandoff between rival political factions.
Libyanproduction losses could reach between 900,000 and 1 million bpd and last forseveral weeks, according to consulting firm, Rapidan Energy Group.
Meanwhile,Iraqi supplies are also expected to shrink after the country's output surpassedits OPEC+ quota, a source with direct knowledge of the matter told Reuters onThursday.
Iraq plansto reduce its oil output to between 3.85 million and 3.9 million bpd nextmonth.
Brent andWTI, however, are still headed for declines of 0.7% and 2.3% for August, theirsecond straight monthly drops.
Worries overdemand continue to weigh on the market, with U.S. inventory data showing acrude stock draw for the week ended on Aug. 23 around a third smaller thanexpected.
"Themarket is concerned about the medium-term outlook, with oil balances for 2025looking weak," ANZ analysts said in a note.
"Webelieve OPEC will have no choice but to delay the phase out of voluntaryproduction cuts if it wants higher prices," the ANZ analysts said.
TheOrganization of the Petroleum Exporting Countries (OPEC) and allies, togetherknown as OPEC+, is set to gradually phase out voluntary production cuts of 2.2million bpd over the course of a year from October 2024 to September 2025.
(Reuters)
