Oil prices surged more than 2 percent on Friday as supply interruptions in Libya and projected shutdowns in Norway overcame worries that an economic downturn may affect demand.
Brent oil futures finished at $111.63 a barrel, up $2.60, or 2.4 percent . West Texas Intermediate oil (WTI) closed at $108.43 a barrel, up $2.67, or 2.5 percent.
WTI and Brent traded at roughly 70 percent and 77 percent , respectively, of the previous session’s volumes ahead of the U.S. Fourth of July vacation.
For the week, Brent fell 1.3 percent , while WTI increased 0.8 percent . For June, both benchmarks had finished the month lower for the first time since November.
Prices surged on Friday despite the publication of industry data indicating U.S manufacturing output slowed more than anticipated last month, adding to signals that the country’s economy was cooling as the Federal Reserve tightens monetary policy.
Still, low crude and gasoline supply maintained the oil market even as stocks plummeted and the U.S. currency, which generally has an inverse connection with crude, climbed.
“The ability of the complex to register a robust rise today in the face of major U.S. dollar strength and a bad equities trade shows some concentrate on tight oil supply,” Jim Ritterbusch, president of Ritterbusch and Associates LLC, wrote in a note.
A planned strike among Norwegian oil and gas employees on July 5 may lower the country’s total petroleum production by roughly 8 percent , or around 320,000 barrels of oil equivalent per day, unless a last-minute resolution is made over salary demands, a Reuters estimate indicated.
Libya’s National Oil Corporation on Thursday imposed force majeure at the Es Sider and Ras Lanuf ports, as well as the El Feel oilfield. Force majeure is still in force at the ports of Brega and Zueitina, NOC added.
Production has experienced a severe reduction, with daily exports ranging between 365,000 and 409,000 barrels per day, a decrease of 865,000 bpd compared with production under “normal conditions”, NOC stated.
The U.S. oil rig count, an early sign of future production, climbed by one to 595 this week, its highest since March 2020, according to energy services company Baker Hughes Co (BKR.O) (BKR.O).
Even while the U.S. oil rig count has climbed for a record 22 months through June, weekly gains have mainly been in single digits as many businesses concentrate more on repaying money to investors and paying down debt than than raising production.
Meanwhile, Ecuador’s government and indigenous organizations’ leaders on Thursday struck a deal to terminate more than two weeks of demonstrations which had led to the shut-in of more than half of the country’s pre-crisis 500,000-bpd oil production.
On Thursday, the OPEC+ group of producers, including Russia, decided to continue to its production policy following two days of discussions. However, the producer club avoided debating policy from September forward.
Previously, OPEC+ resolved to boost production each month by 648,000 barrels per day (bpd) in July and August, up from a prior commitment to add 432,000 bpd each month.
A Reuters poll indicated that OPEC pumped 28.52 million bpd in June, down 100,000 bpd from May’s corrected level.
U.S. President Joe Biden will make a three-stop journey to the Middle East in mid-July that includes a visit to Saudi Arabia, thrusting energy policy into the forefront as the United States and other nations confront increasing gasoline costs that are driving up inflation.
Biden said on Thursday he will not openly urge Saudi Arabia to raise oil production to control skyrocketing prices when he encounters the Saudi king and crown prince during a visit this month.
