By Adedapo Adesanya
Oil settled slightly lower on Friday but recorded a weekly gain as Middle East tensions and disruptions to crude output offset concerns about the Chinese and global economies.
Brent futures lost 54 cents during the session to sell at $78.56 a barrel, and the US West Texas Intermediate (WTI) crude fell by 67 cents to settle at $73.41 per barrel.
For the week, Brent gained about 0.5 per cent while the US benchmark rose over 1 per cent.
In China, slower-than-expected economic growth in the fourth quarter raised doubts about forecasts that demand there will drive global oil growth in 2024.
China’s economy in the fourth quarter expanded by 5.2 per cent year-on-year, below analysts’ expectations, and this raised questions about previous forecasts that Chinese demand will fuel global oil growth in 2024.
Tensions in the Middle East offered support as geopolitical risks boosted prices for the week.
On Friday, tensions escalated in Gaza as Israeli forces pushed south against Hamas militants, while earlier in the week, the US launched new strikes against Houthi anti-ship missiles aimed at the Red Sea.
Although conflict in the Middle East has not shut down any oil production, supply outages continued in Libya over protests.
In the US, about 30 per cent of oil output in North Dakota, the country’s third largest producing state, remained shut down due to extreme cold.
This may worsen, as the state regulator said on Friday that it may take a month before crude oil production in the state returns to normal.
Extreme weather has eaten into crude oil production in North Dakota to the tune of hundreds of thousands of barrels so far, with the cold weather creating power outages and shutting down oil refineries.
It has essentially cut crude oil production in North Dakota by half, cutting out 700,000 barrels per day from its typical 1.24 million barrels per day of oil production.
The North Dakota Pipeline Authority said on Friday that production was now down from 350,000 barrels per day to 400,000 barrels per day for oil.
The tightening supply and temporary oil and gas production curtailments will come as a welcome relief for the Organisation of the Petroleum Exporting Countries (OPEC), which looks to be struggling to live up to its oil production cut promises for January.
Meanwhile, the number of oil rigs operating in the US, an early indicator of production, fell by two to 497 this week, Baker Hughes said on Friday.
Modupe Gbadeyanka