Oil set for first weekly loss in a month
Opec output rose in September and US production reached two-year high
HONG KONG: Oil is set for the first weekly decline since early September on rising global output as Tropical Storm Nate moves toward the US Gulf.
Futures were little changed in New York and are down 1.8% this week. Organisation of Petroleum Exporting Countries (Opec) output climbed marginally in September, US production reached a two-year high last week and Libya restarted its biggest oil field. Companies from BP Plc to Chevron Corp are shutting platforms in the Gulf of Mexico to prepare for Tropical Storm Nate, which is forecast to become a hurricane south of Louisiana on Saturday.
While oil rallied into a bull market last month on the prospect of stronger demand, prices struggled to hold above US$52 a barrel as supply grew from the US and two members of the that are exempt from making cuts. Saudi Arabia and Russia reaffirmed their cooperation during a visit from King Salman bin Abdulaziz this week, with President Vladimir Putin saying he is open to extending the agreement with Opec until the end of 2018 if required.
“Higher Opec production in September as well as the prompt return of supplies from Libya after the brief closure of their biggest field weighed on oil futures this week,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. West Texas Intermediate for November delivery was at US$50.73 a barrel on the New York Mercantile Exchange, down 5 US cents, at 9.15am London time.
Total volume traded was about 54% below the 100-day average. Prices rose 81 US cents to US$50.79 on Thursday, the first gain in four sessions.
Brent for December settlement rose 17 US cents to US$57.18 a barrel on the Londonbased ICE Futures Europe exchange. Prices are down 0.6% for the week. The global benchmark crude traded at a premium of US$6.08 to December WTI.
Opec pumped 32.83 million barrels a day in September, up 120,000 barrels a day from August, as output recovered in Libya and Nigeria, according to figures compiled by Bloomberg.
Production at Libya’s Sharara field increased to 200,000 barrels a day as it reopened after a halt forced by gunmen on Sunday, said a person with knowledge of the matter. US oil output rose by 14,000 barrels a day to 9.56 million a day last week, according to data from the Energy Information Administration.
Tropical Storm Nate was 121 km east-southeast of Isla Guanaja, Honduras, with top winds of 72 km an hour, the US National Hurricane Center said in an advisory at 2am New York time.