Oil prices set for 10% weekly jump on U.S., Norway outages

By Scott DiSavino NEW YORK (Reuters) - Oil prices were little changed on Friday but both benchmarks were on track for a 10% weekly gain, their biggest since June, on the back of supply cuts caused by a hurricane in the U.S. Gulf Coast and a strike of offshore workers in Norway.

Reuters October 10, 2020 00:06:05 IST
Oil prices set for 10% weekly jump on U.S., Norway outages

Oil prices set for 10 weekly jump on US Norway outages

By Scott DiSavino

NEW YORK (Reuters) - Oil prices were little changed on Friday but both benchmarks were on track for a 10% weekly gain, their biggest since June, on the back of supply cuts caused by a hurricane in the U.S. Gulf Coast and a strike of offshore workers in Norway.

Brent futures rose 18 cents, or 0.4%, to $43.52 a barrel by 11:56 a.m. EDT (1556 GMT), while U.S. West Texas Intermediate (WTI) crude rose 14 cents, or 0.3%, to $41.33.

Both contracts were on track for weekly gains of about 10% this week, their first increase in three weeks.

Prices turned from slightly negative to slightly positive following news that U.S. House Speaker Nancy Pelosi said she and Treasury Secretary Steven Mnuchin planned to hold talks later in the day amid ongoing negotiations for further COVID-19 federal aid package.

Pelosi said she hopes the Democrats and the administration can reach a deal soon.

In Norway, oil workers could end their 10-day strike later on Friday if a set of new proposals from the oil industry proves satisfactory, the head of the Lederne trade union told Reuters.

An escalation of the strike could almost triple the existing outage if no solution is reached by Oct. 14, taking the total capacity cut to about 934,000 barrels of oil equivalents per day.

Hurricane Delta, meanwhile, has shut 1.67 million barrels per day, or 92%, of U.S. Gulf of Mexico oil output, the most since 2005 during Hurricane Katrina.

"We believe we are soon in for an oil price correction when the Norway strike is resolved and when the hurricane in the U.S. goes away ... These $40+ price levels are as fragile as glass," Rystad's Head of Oil Markets, Bjornar Tonhaugen, said.

Looking ahead, JP Morgan said that a worsening global oil demand outlook due to a potential rise in coronavirus cases this winter would likely prompt the Organization of the Petroleum Exporting Countries (OPEC) to reverse a planned easing of oil cuts in 2021, with Saudi Arabia offering deeper cuts below its current quota.

(Additional reporting by Shadia Nasralla in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and Louise Heavens)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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