Oil rose more than 2% as supply cuts outweighed recession concerns
Oil prices rose more than 2% on Friday as supply disruptions in Libya and expected shutdowns in Norway outweighed the possibility that an economic slowdown could dampen demand.
Brent crude futures were up $2.60, or 2.4%, to settle at $111.63 a barrel. West Texas Intermediate crude (WTI) rose $2.67, or 2.5%, to $108.43 a barrel.
WTI and Brent were trading around 70% and 77% respectively of the previous session ahead of the US July 4th holiday.
During the week, Brent fell 1.3% while WTI rose 0.8%. In June,both benchmarks ended the month lower for the first time since November.
Prices rose on Friday despite the release of industry data showing that US manufacturing activity slowed more than expected last month, adding to evidence that the country's economy is cooling as the Federal Reserve tightens monetary policy.
Lower crude oil and fuel supplies supported the oil market despite stocks falling and the US dollar rising, which typically has an inverse relationship to crude oil.
The complex's ability to make strong headway today in the face of significant US dollar strength and weak stock trading indicates a refocus on tight oil supplies.
According to calculations, a planned strike among Norwegian oil and gas workers on July 5 could reduce the country's overall oil production by about 8%, or the equivalent of about 320,000 barrels per day, if there is no last-minute compromise.
The Libyan National Oil Company declared force majeure on Thursday at the El Feel oil field, as well as the ports of Es Sider and Ras Lanuf. The NOC said force majeure is still in effect at the ports of Brega and Zueitina.
The NOC said exports fell sharply, with exports ranging between 365,000 and 409,000 bpd, a decrease of 865,000 bpd compared to production under normal conditions.
U.S. oil rig counts rose by one this week to 595, the highest since March 2020, according to energy services firm Baker Hughes.
While the number of US oil rigs rose to a record 22 months through June, weekly increases were mostly in the single digits as many companies focused on repaying back to investors and paying off debt rather than increasing production.
Meanwhile, the Ecuadorian government and leaders of indigenous groups reached an agreement on Thursday to end more than two weeks of protests that have shut down more than half of the country's pre-crisis oil production of 500,000 barrels.
Previously, OPEC+ had decided to increase production by 648,000 barrels per day (bpd) each month in July and August, compared to its previous plan to add 432,000 barrels per month.
On Thursday, the OPEC+ group of producers, including Russia, agreed to stick to its production strategy after two days of meetings. However, the producer group refrained from discussing policy beyond September.
OPEC pumped 28.52 million bpd in June, down 100,000 bpd from May's revised total, according to surveys.
The US President will make a three-stop Middle East tour that includes Saudi Arabia in mid-July, and will highlight energy policy in response to rising fuel prices that drive inflation in the US and elsewhere.
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