Oil headed for a sixth weekly increase as falling OPEC production tightened global crude markets, offsetting concerns that slower economic growth will weaken demand.
Futures rose 1.4 percent in New York on Friday and have gained 2.2 percent this week, heading for their best run since 2016. Libyan warlord Khalifa Haftar has moved his forces to the gates of Tripoli, triggering alarm that the OPEC member could slide deeper into instability. Output from the Organization of Petroleum Exporting Countries is already plunging because of deliberate cutbacks and an escalating crisis in Venezuela.
Crude prices have rallied more than 40 percent this year as curbs by OPEC and its partners — originally intended to prevent a surplus — are compounded by unintended losses in member nations Venezuela and Iran, and now potentially Libya. While that’s tightening the market, the International Energy Agency said it could lower its demand forecasts because of lingering threats to the global economy.
“Demand is mixed” but “the tightness of the market is going to win out,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd., said in a Bloomberg television interview.
West Texas Intermediate for May delivery added 86 cents to $64.44 a barrel on the New York Mercantile Exchange as of 11 a.m. in London.
Brent for June settlement rose 75 cents to $71.58 a barrel on the London-based ICE Futures Europe exchange, and are up 1.8 percent this week. The global benchmark crude was at a premium of $7.06 to WTI for the same month.
The International Monetary Fund predicted this week that global growth this year will be the weakest in a decade. Risks to oil demand are “currently to the downside,” the IEA said in a report on Thursday.
Other oil-market news: Saudi Aramco’s bond prospectus shows that the world’s top crude exporter is feeding more than a third of its oil into its fully-owned and joint venture refineries. Energy consultant Rystad Energy AS has raised its production targets in the Permian Basin of West Texas and New Mexico for April by 30,000 barrels to 4.34 million barrels a day. As calls for action against climate change get stronger, concern is mounting within Norway’s oil industry after the country’s biggest political party last week decided to withdraw support for drilling off the Lofoten islands.