By Adedapo Adesanya
Crude oil traded mixed on Friday with the global prices bearish and the US prices up modestly but both benchmarks logged their biggest weekly gain since June.
This happened after major oil producers pledged their full commitment to output cuts with new development in the conflict situation in Libya impacting prices.
Brent crude fell 22 cents or 0.51 per cent to $43.08 per barrel. The benchmark rose to the $43 per barrel benchmark at the previous session.
On the other hand, the United States West Texas Intermediate (WTI) crude settled higher at 14 cents or 0.34 per cent to $41.11 barrel.
Both benchmarks, however, marked weekly gains after Saudi Arabia pressed allies to stick to production quotas. Hurricane Sally cut US production and predictions of a supply deficit.
For the week, WTI was up 10.1 per cent, which marked the largest weekly rise since the week ended June 5, while Brent added 8.3 per cent, the strongest rise since the week ended June 19.
Earlier in the day, the market was holding onto outcome from a meeting of the key panel for the Organization of the Petroleum Exporting Countries and its allies (OPEC+) which pressed for better compliance with oil output cuts against the backdrop of falling crude prices.
Saudi Arabia’s Prince Abdulaziz bin Salman said that the OPEC+ could hold an extraordinary meeting in October if the oil market worsens because of weak demand and rising coronavirus cases, a piece of news that was welcomed at the market.
However, prices ended below the session’s highs after it was reported that Libyan commander Khalifa Haftar announced a conditional lifting of a months-long blockade of oilfields and ports by the Libyan National Army. This happened because of expectations for higher global crude supplies, a huge worry for the market especially with demand not keeping up.
Traders will closely monitor the situation in Libya as it could add 1.1 million barrels per day to global crude production.
The blockade slashed Libyan production to just over 100,000 barrels per day now from around 1.2 million barrels per day previously. It was unclear how quickly Libya could ramp up production.
In a forecast, Goldman Sachs predicted a market deficit of 3 million barrels per day by the fourth quarter and reiterated its target for Brent to reach $49 by year-end and $65 by the third quarter of 2021.
Prices were also supported by information from the Gulf of Mexico that US producers have started rebooting rigs following a five-day closure due to Hurricane Sally which saw over 500,000 barrels a day turned off.
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