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Oil prices stabilize amid supply concerns, fluctuating demand
(MENAFN) Oil prices remained stable in early trading on Friday, as investors weighed the risks of potential supply disruptions in the Middle East against indications of declining demand. Brent crude futures for October delivery, which are set to expire on Friday, showed little movement. The more actively traded November contract fell slightly by 7 cents, or 0.09 percent, to settle at USD78.75 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures decreased by 11 cents, or 0.14 percent, reaching USD75.80 per barrel. This stability follows a more than one-dollar increase for both crude benchmarks at the previous session's settlement, driven by concerns about supply disruptions.
The market's supply fears were largely fueled by developments in Libya, where more than half of the country's oil production—approximately 700,000 barrels per day—was halted on Thursday. The shutdowns occurred after tensions escalated between rival political factions, leading to the suspension of exports at several ports. According to the Rapidan Energy Group, a consultancy firm, Libya's production losses could escalate to between 900,000 and 1 million barrels per day and may continue for several weeks. Additionally, supply concerns have been compounded by expected reductions in Iraqi oil output. Iraq's production recently exceeded its OPEC+ quota, prompting plans to cut its output to between 3.85 million and 3.9 million barrels per day next month.
Despite these supply concerns, oil prices are on course to decline for the second consecutive month. Earlier in the week, prices fell by 1 percent after U.S. crude inventory data showed a smaller-than-anticipated decline. U.S. crude inventories decreased by 846,000 barrels to 425.2 million barrels, which was significantly below the 2.3 million-barrel reduction forecast by analysts in a poll. Analysts at ANZ bank expressed concern over the medium-term outlook for the oil market, noting that oil budgets for 2025 appear weak, which has further weighed on market sentiment.
The market's supply fears were largely fueled by developments in Libya, where more than half of the country's oil production—approximately 700,000 barrels per day—was halted on Thursday. The shutdowns occurred after tensions escalated between rival political factions, leading to the suspension of exports at several ports. According to the Rapidan Energy Group, a consultancy firm, Libya's production losses could escalate to between 900,000 and 1 million barrels per day and may continue for several weeks. Additionally, supply concerns have been compounded by expected reductions in Iraqi oil output. Iraq's production recently exceeded its OPEC+ quota, prompting plans to cut its output to between 3.85 million and 3.9 million barrels per day next month.
Despite these supply concerns, oil prices are on course to decline for the second consecutive month. Earlier in the week, prices fell by 1 percent after U.S. crude inventory data showed a smaller-than-anticipated decline. U.S. crude inventories decreased by 846,000 barrels to 425.2 million barrels, which was significantly below the 2.3 million-barrel reduction forecast by analysts in a poll. Analysts at ANZ bank expressed concern over the medium-term outlook for the oil market, noting that oil budgets for 2025 appear weak, which has further weighed on market sentiment.
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