By Adedapo Adesanya
Oil gained on Friday amid geopolitical tensions and fresh stimulus from top crude importer China, with Brent crude futures up by 38 cents or 0.53 per cent at $71.89 per barrel and the US West Texas Intermediate (WTI) crude futures up by 51 cents or 0.75 per cent at $68.18 per barrel.
However, on a week-on-week basis, Brent went down by 3 per cent and the WTI fell by around 5 per cent.
The Organisation of the Petroleum Exporting Countries and its allies, together known as OPEC+, will go ahead with plans to increase production by 180,000 barrels per day each month starting from December, Reuters reported citing sources.
This follows a Financial Times report on Wednesday, which said the planned increase is due to Saudi Arabia’s decision to abandon a $100 oil price target and gain market share although Saudi Arabia has repeatedly denied targeting a certain oil price.
More barrels can be expected to enter the global market after rival factions staking claims for control of the Central Bank of Libya signed an agreement to end their dispute on Thursday.
The rift had seen crude exports fall to 400,000 barrels per day this month from more than 1 million barrels per day last.
Support also came as China’s central bank on Friday lowered interest rates and injected liquidity into the banking system, aiming to pull economic growth back toward this year’s target of roughly 5 per cent just as more fiscal measures are expected to be announced.
Israel recently launched an airstrike on Hezbollah’s key headquarters in Beirut, the deadliest attack in nearly a year of conflict. The bombings have since raised geopolitical concerns.
Hezbollah retaliated with rocket fire and marine security warnings issued for vessels entering Israeli ports, the conflict poses a direct threat to regional commercial lines.
Meanwhile, the Houthis in Yemen have also upped their attacks on US ships and Israeli targets, further complicating the region.
This development has resulted in increased risk evaluations for ships and oil transfer. Insurance costs are projected to climb as the threat of collateral damage to Israeli and neighbouring maritime infrastructure looms.