Thu. May 30th, 2024

•Prices will come under downward pressure as long as OPEC+ continues its tight market policy, experts say

By Sibel Morrow

Oil prices climbed on Friday, heading for gains for the seventh consecutive week over reports of supply disruptions in Libya and an explosion on an oil production ship off the coast of Nigeria.

International benchmark Brent crude was trading at $91.44 per barrel at 0654 GMT with a 0.36% gain after closing the previous session at $91.11 a barrel.

American benchmark West Texas Intermediate (WTI) traded at $90.78 per barrel at the same time for a 0.56% rise after it ended the previous session at $90.27 a barrel.

Both benchmarks cleared $90 a barrel during the previous trading sessions over reports of supply disruptions in Libya and Nigeria, the latter of which has already been struggling to meet OPEC+ production quotas.

Fire razed an oil and gas vessel off the Nigerian coast on Thursday.

The tanker, with a daily processing capacity of about 22,000 barrels of oil, had 10 workers on board when it burst into flames near the Delta region, an official of the Shebah Exploration & Production Company Ltd., which owns the tanker confirmed, adding that the company has started an investigation into the cause of the fire.

In Libya, the National Oil Corporation (NOC) halted exports from the ports of Brega, Zueitina, Ras Lanuf, Zawiya, Mellitah and Sidra on Thursday due to bad weather.

Record price increases came despite a massive winter storm in the US that caused a wide range of power outages and thousands of flight cancellations.

Although no reports have been made on supply disruptions in the Gulf of Mexico, thousands of flights have been canceled and more than 100,000 power outages have been reported on Wednesday and Thursday because of the massive winter storm in the center of the country.

An estimated 108 million people from the state of New Mexico to Maine have been subject to winter and flood alerts early Thursday, according to NBC News.

The strong storm and ice have caused disruptions in southern and midwestern states, while authorities warn of more power outages.

And there have been more than 4,000 flight cancellations into or out of the country, according to flight-tracking site FlightAware.

As of early Thursday, more than 60,000 customers were without power in Texas, according to outage tracker PowerOutage.us, while the state of Arkansas reported more than 25,000 outages.

– OPEC’s supply policy keeps market tight

Higher oil prices were also supported after the latest decision of the Organization of Petroleum Exporting Countries (OPEC) to hold the output increase at 400,000 barrels per day.

“As long as OPEC keeps its supply constant, we will not see any real downward pressure on price,” said Randall Mohammed, a financial representative of US-based Northwestern Mutual and energy market commentator.

Mohammed also stressed that the physical curtailment to production with missile attacks hitting production, storage, transport and refining facilities plays a larger role in supply-demand fundamentals than short-lived geopolitics.

Credits | AA

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