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Oil Prices Mixed As OPEC Boost Countered By Libyan Developments

Oil Prices Mixed As OPEC Boost Countered By Libyan Developments

Oil prices were mixed on Friday after Libyan commander Khalifa Haftar said a blockade on Libyan oil exports would be lifted for one month, countering more bullish signals from an OPEC meeting on Thursday.

LONDON: Oil prices were mixed on Friday after Libyan commander Khalifa Haftar said a blockade on Libyan oil exports would be lifted for one month, countering more bullish signals from an OPEC meeting on Thursday.

Brent crude was down 17 cents at $43.13 a barrel by 1321 GMT while U.S. oil futures ticked up 6 cents to $41.03.

The benchmarks were still set for weekly gains after Hurricane Sally cut U.S. production, Saudi Arabia pressed allies to stick to production quotas and banks including Goldman Sachs predicted a supply deficit.

Pre-blockade Libya was producing around 1.2 million bpd, compared with just over 100,000 bpd now. It is unclear how quickly Libya could ramp up production.

Earlier, Goldman Sachs predicted a market deficit of 3 million barrels per day (bpd) by the fourth quarter and reiterated its target for Brent to reach $49 by the end of the year and $65 by the third quarter of 2021.

Swiss bank UBS also pointed to the possibility of undersupply, forecasting Brent would rise to $45 a barrel in the fourth quarter and to $55 by mid-2021.

The Organization of the Petroleum Exporting Countries and other producers, a group known as OPEC+, are cutting output by 7.7 million bpd and stressed at a meeting on Thursday that it would take action against members not complying with the deal.

“We think (OPEC+) will put on hold plans to taper the cut down to 5.8 million bpd … when the entire group convenes again in December,” RBC analysts said.

Saudi Arabia said an earlier meeting was possible if oil prices fell alongside demand because of a second wave of coronavirus cases.

“The market now feels the ground more stable to maintain $40+ price levels,” said Rystad’s Head of Oil Markets Bjornar Tonhaugen.

In the Gulf of Mexico, U.S. producers started rebooting rigs following a five-day closure due to Hurricane Sally.

A tropical depression in the western part of the Gulf of Mexico could become a hurricane in the next few days, potentially threatening more oil facilities.

(Additional reporting by Aaron Sheldrick; editing by Louise Heavens and Elaine Hardcastle)

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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